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Ch03.pptDemand Elasticities
Chapter 3
© 2014 Pearson Education, Inc.
Chapter 3 Demand Elasticities
© 2014 Pearson Education, Inc.
EQUATION 3.1 – 3.2 Price elasticity of demand(eP)
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Chapter 3 Demand Elasticities
© 2014 Pearson Education, Inc.
FIGURE 3.1 Price Elasticity and the Movement Along a Demand Curve
Chapter 3 Demand Elasticities
© 2014 Pearson Education, Inc.
TABLE 3.1 Values of Price Elasticity of Demand Coefficients
Chapter 3 Demand Elasticities
© 2014 Pearson Education, Inc.
FIGURE 3.2 Elastic Demand and Total Revenue
Chapter 3 Demand Elasticities
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FIGURE 3.3 Inelastic Demand and Total Revenue
Chapter 3 Demand Elasticities
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EQUATION 3.3 Arc Price Elasticity of Demand
Chapter 3 Demand Elasticities
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EQUATION 3.4 Point Price Elasticity of Demand
Chapter 3 Demand Elasticities
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EQUATION 3.5 Linear Demand Function
Chapter 3 Demand Elasticities
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TABLE 3.2 Numerical Example of Demand, Total Revenue, Average Revenue, and Marginal Revenue Functions
Chapter 3 Demand Elasticities
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TABLE 3.3 Numerical Values for the Functional Relationships in Table 3.2
Chapter 3 Demand Elasticities
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TABLE 3.4 Arc Price Elasticity Versus Point Price Elasticity Calculations (Data from Tables 3.2 and 3.3)
Chapter 3 Demand Elasticities
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FIGURE 3.4 Demand and Marginal Revenue Functions
Chapter 3 Demand Elasticities
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FIGURE 3.5 The Total Revenue Function
Chapter 3 Demand Elasticities
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TABLE 3.5 Relationships for a Linear Downward Sloping Demand Curve
Chapter 3 Demand Elasticities
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FIGURE 3.6 Vertical Demand Curve
Chapter 3 Demand Elasticities
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FIGURE 3.7 Horizontal Demand Curve
Chapter 3 Demand Elasticities
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TABLE 3.6 Income Elasticity and Cross-Price Elasticity of Demand Coefficients
Chapter 3 Demand Elasticities
© 2014 Pearson Education, Inc.
TABLE 3.7 Estimates of Demand Elasticities
Chapter 3 Demand Elasticities
© 2014 Pearson Education, Inc.
TABLE 3.7 Estimates of Demand Elasticities
Chapter 3 Demand Elasticities
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TABLE 3.8 Elasticity Coefficients from Marketing Literature
Chapter 3 Demand Elasticities
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FIGURE 3.A1 Derivation of a Consumer Indifference Curve
Chapter 3 Demand Elasticities
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FIGURE 3.A2 Illustration of Consumer Indifference Curves
Chapter 3 Demand Elasticities
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FIGURE 3.A3 A Convex Indifference Curve
Chapter 3 Demand Elasticities
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EQUATION 3.A1 The Budget Constraint
Chapter 3 Demand Elasticities
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FIGURE 3.A4 The Budget Line
Chapter 3 Demand Elasticities
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FIGURE 3.A5 Change (Increase) in Income (Prices Constant)
Chapter 3 Demand Elasticities
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FIGURE 3.A6 Change (Decrease) in the Price of Good X (All Else Constant)
Chapter 3 Demand Elasticities
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FIGURE 3.A7 The Consumer Maximization Problem
Chapter 3 Demand Elasticities
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FIGURE 3.A8 Consumer Equilibrium with a Change in Income (Two Normal Goods)
Chapter 3 Demand Elasticities
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FIGURE 3.A9 Consumer Equilibrium with a Change in Income (One Normal and One Inferior Good)
Chapter 3 Demand Elasticities
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FIGURE 3.A10 Consumer Equilibrium with a Decrease in the Price of Good X (Inelastic Demand for X)
Chapter 3 Demand Elasticities
© 2014 Pearson Education, Inc.
FIGURE 3.A11 Consumer Equilibrium with a Decrease in the Price of Good X (Elastic Demand for X)
