Introduction

In the last lesson you were introduced to the concept of demand. Remember that demand requires the desire, ability, and willingness to buy a product or good. In this lesson you will learn more about demand and specifically about the concept of elasticity of demand. Elasticity is an important cause and effect relationship in economics, and is a measure of responsiveness that tells us how a dependent variable such as quantity responds to a change in an independent variable such as price.

Additionally, in this lesson you will learn how to take the information you have learned about demand and graphically represent that information. Graphs are one method that economists use to understand the sometimes complicated elements of demand.

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Lesson Objectives

Following successful completion of this lesson, students will be able to:

  • explain why elasticity is a measure of a responsiveness.
  • analyze the elasticity of demand for a product.
  • understand the factors that determine demand elasticity.
  • illustrate on a graph the law of demand.

The above objectives correspond with the Alabama Course of Study: Economics Objective(s): 6.2, 6.3, 6.4.

 

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