AP Economics – 10/03/18

I.  Bellwork (Show Your calculations)

The local pizzeria sells pizza for $12 a pie. Doing so, he has sold 150 pizza pies a week for the past year. He decides to raise his price to $15 and sees the sales of his pizza pies drop to 100 per week.

1. Using the midpoint formula, calculate the elasticity of demand for pizza pies and determine whether it is elastic, inelastic, or unit elastic.
2. Using the total revenue test determine the elasticity of demand.

II.   Objectives:

• Calculate the price elasticity of demand
• Identify and apply the factors that determine price elasticity of demand
• Interpret and communicate elasticity and inelasticity by constructing graphs to illustrate how price elasticity changes along a demand curve

III.  Discussion/Classwork

A.  Review Income & Substitution Effect – Worksheet 46.1:

B.  Price Effect & Quantity Effect – Read Pages 471-472

C.  Review Worksheet 47.2: Elasticity Practice

• Utilize the factors that determine elasticity
• Construct graphs to determine the impact on price and quantity based on changes to elastic and inelastic demand curves

IV.   Elasticity of demand qiuz

AP Economics