Economics 2182A/B Lecture 11: Economics 2182A - Lecture 11
19 Nov 2018
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North american vs. european leagues: the main difference between north american and european sports leagues is that the. Rogers centre can charge so much and people will still buy it because there are no other options if you want food, you have to buy it at that price. Because there is no alternative within the stadium, the demand is inelastic, but outside of it the demand is elastic (there are lots of alternatives. ) Elasticity: sensitivity/responsiveness of demand to a change of price. Price elasticity of demand will always be negative because of the law of demand. As price goes up, quantity will go down. P = % (cid:3018)% (cid:3017) = (cid:3266)(cid:3266) (cid:3265)(cid:3265) = (cid:3018) (cid:3017) x (cid:3017)(cid:3018) For every 1% increase in price, quantity sold drops by 3%. If p = -3 and the price increases by 10%, quantity demanded will go down by 30%. Quantity demanded is sensitive to price change (elastic. )
