elasticity+yj

**JANE WOO'S DEMAND ELASTICITY** media type="file" key="econfinal.m4a"  =THE basics: the price ELASTICITY of DEMANDS. = The price elasticity of demands is all about the consumers reaction to the change in price. If one's demand reacts a lot to the change in price, it's said to be elastic. However, if one only reacts slightly to the change in price, it's said to be inelastic. To determine if it's inelastic or elastic we use the formula: Elasticity = (% change in quantity / % change in price)

**THEREFORE, today we will be looking at how the CHANGE in PRICE affects JANE'S reaction. FIRST OF ALL, the DETERMINANTS of PRICE ELASTICITY of DEMAND.** media type="file" key="econfinal2.m4a" **1.** SUBSTITUTES  2. **NEEDS V. LUXURIES** **3.** DEFINITION OF THE MARKET **4.** TIME HORIZON =* JANE'S NEED V. LUXURY (J.J. CATERING V. KIS STORE) =  media type="file" key="econecon.m4a" **J.J. Catering is our school's food providing company. Jane, just like any students, purchase her lunch from this place. Her elasticity for food is INELASTIC because food is a necessity for her. Therefore, when the price of the food rises, she will continue to buy from J.J. Catering because despite the increase of price, she still needs to eat.** media type="custom" key="3939165" * JANE'S SUBSTITUES (J.J. CATERING) J.J. Catering offers Western, Korea, and Deli food. Jane likes to eat ALL three of them. However, the price of the BLT sandwich, which Jane always buys, increases. Although Jane likes the sandwich and food is a necessity, her elasticity for the sandwich is ELASTIC. The reason is because the sandwich has SUBSTITUTES. Although the deli increased its price on sandwiches, the Korean and Western food section did not. As a result, Jane will substitute her everyday BLT sandwich with either the Korean or Western selections. THEREFORE, BLT sandwich has an ELASTIC demand because it has substitutes -> WESTERN AND KOREAN FOOD.** 
 * The Phoenix Store is where Jane likes to buy her hoodies. The price of a hoodie is $20. Yet, when the price rises to $25, Jane decides not to buy the hoodie. The reason is because she has sufficient clothes; therefore, new hoodies from the KIS store is a luxury, not a necessity. As a result, its elasticity of demand is ELASTIC, which explains why Jane stops buying hoodies when the price rises.