ECON 1P91 Lecture Notes - Lecture 4: Pyrimethamine, Demand Curve, Tylenol (Brand)

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ECON 1P91 Full Course Notes
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ECON 1P91 Full Course Notes
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As price increases quantity demand does not change no matter the cost people with diseases needed the drug to live. Daraprim drug essential for people with hiv/aids increased the price of the drug by 4500% (from. 3$/day to 750$/day) there is no other substitute and people with disease need it daily. Price elasticity of demand how sensitive quantity demanded is to change in price. Price elasticity of supply how sensitive quantity supplied is to changes in price. Elasticity of demand = ed, eq,p (can be shown as either) = % change in q / % change in p. As price change so does the quantity demand as price increases quantity demand decrease. Inelastic: if -1< ed = 0, then demand is inelastic (i. e. A one unit increase in price causes a less than one unit demand decreases in quantity demanded) A one unit increases in price causes a one unit decrease in quantity demanded)

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