ECON 10010 Lecture Notes - Lecture 4: Demand Curve, Midpoint Method
Document Summary
Demand curve: 5 different shapes for demand, definition of elasticity, calculating elasticity: midpoint method, in-class problem: what shape gives us a constant price-elasticity of qd, 5 different elasticities for supply, other things than price affect qd or qs. What about their elasticities: in-class problem: revenue maximization, more in-class problems. Lecture material: demand curve, downward slope determines specific price and specific quantity demanded, y-axis: valuation price of each buyer, x-axis: valuation of demand, what makes the demand curve true. Diversity of valuations (price willing to sell for) Qd: qd determines the actual quantity of. Phigh transactions: number of sellers = qd, the market forces will push price down. % (cid:2913)(cid:2918)a(cid:2924)(cid:2917)(cid:2915) (cid:2919)(cid:2924) (cid:2900)r(cid:2919)(cid:2913)(cid:2915: the percent changes are not the same thing as the slope, midpoint method for calculating elasticity: Midpoint method (cid:1871)(cid:1872)(cid:1855)(cid:1872)= (cid:4666)(cid:1843)(cid:2870) (cid:1843)(cid:2869)(cid:4667)[(cid:4666)(cid:1843)(cid:2870)+(cid:1843)(cid:2869)(cid:4667) (cid:884)] (cid:4666)(cid:1843)(cid:2870) (cid:1843)(cid:2869)(cid:4667)[(cid:4666)(cid:1843)(cid:2870)+(cid:1843)(cid:2869)(cid:4667) (cid:884): unit elastic demand curve, has an elasticity of -1 in the middle, it is not a one-to-one relationship of the slope, constant elasticity, possibilities.
