Markets and elasticity
| English | 中文 | Pinyin |
|---|---|---|
| elasticity/ɪlæˈstɪsɪti/ | 弹性 | tán xìng |
| equilibrium/ˌiːkwɪˈlɪbrɪəm/ | 均衡 | jūn héng |
A decision you can investigate
- A café raises the price of a drink from 10 to 11 yuan and sales fall from 100 to 80 cups.
- Did customers move along demand, or did their preferences change?
Build the explanation
- Demand shows quantities consumers are willing and able to buy at each price. A price change gives a movement along the curve.
- Income, preferences or substitute prices can shift demand; input costs or technology can shift supply.
Match the terms to their precise meanings.
Use these definitions in the particular context of Markets and elasticity.
Work through the evidence
- Using initial values, percentage price change is 10% and percentage quantity change is −20%.
- PED = percentage quantity change
- percentage price change = −20/10 = −2. Revenue falls from 1,000 to 880 yuan.
Which description fits the café data if other factors stay unchanged?
Using initial values, percentage price change is 10% and percentage quantity change is −20%. PED = percentage quantity change percentage price change = −20/10 = −2. Revenue falls from 1,000 to 880 yuan.
Test the limits
- State the percentage-change convention and interpret the magnitude. A negative sign describes the usual inverse relationship.
- Do not claim the whole curve has one elasticity 弹性, or confuse a change in quantity demanded with a demand shift.
Which caution belongs to this particular task?
State the percentage-change convention and interpret the magnitude. A negative sign describes the usual inverse relationship. Do not claim the whole curve has one elasticity, or confuse a change in quantity demanded with a demand shift.
The explanation in this lesson makes a conditional claim; relevant context and evidence still matter.
Do not claim the whole curve has one elasticity, or confuse a change in quantity demanded with a demand shift.
Apply and explain your answer
- Which description fits the café data if other factors stay unchanged?
- Demand is price elastic over this change; total revenue falls.
Choose the two statements supported by this lesson.
The concept and worked evidence support these claims; the stated limits rule out the universal shortcut.
Use the terms precisely
- elasticity: Responsiveness of one variable to a change in another.
- equilibrium 均衡: A situation where quantity demanded equals quantity supplied.
Using initial values, percentage price change is 10% and percentage quantity change is −20%. PED = percentage quantity change percentage price change = −20/10 = −2. Revenue falls from 1,000 to 880 yuan.
State the percentage-change convention and interpret the magnitude. A negative sign describes the usual inverse relationship. Do not claim the whole curve has one elasticity, or confuse a change in quantity demanded with a demand shift.
Demand shows quantities consumers are willing and able to buy at each price. A price change gives a movement along the curve.