About This Chapter
Price Determination and Elasticity - Chapter Summary
Our instructors will introduce you to the concepts of pricing in microeconomics. Learn to define price ceilings and floors. Expand your knowledge of supply, demand, and pricing as you view examples of government intervention and market conditions. Discover their effects and determine which ones are legitimate tools and which ones are illegal.
You'll also be introduced to the concept of elasticity. Learn the definitions of price elasticity of both supply and demand as well as their formulas and how to identify examples of elastic and inelastic products. You'll also use the income elasticity of demand formula and learn why income sometimes affects demand. After completing the lessons in this chapter, you should be able to:
- Define price ceilings and floors and show how they affect equilibrium
- Explain how government intervention and market conditions affect supply, demand and price
- Discuss and demonstrate price elasticity in supply and demand formulas and concepts
- Define income elasticity and understand the formula
Our lessons are designed to help you learn faster and retain the knowledge longer. Short, engaging video segments are taught by experienced instructors and feature video tags for quick and easy topic review. The transcript of the lesson is right there below the video, and key terms are often links to definitions and examples. So no matter how you learn, all the information you need is provided. And if you have questions as you study, subject experts are just an email away. After you complete each lesson, take the optional quiz to see what you have learned!
1. Price Ceilings and Price Floors in Microeconomics
Governments can restrict prices from going too low or too high through use of price ceilings. This lesson explains these concepts, as well as problems that can arise from their use.
2. Controlling Supply: Government Intervention & Market Forces
Sometimes, despite the best efforts of the market, a heavy hand is needed to control supply. This lesson looks at how the government and the market can work to do just that.
3. Price Elasticity of Demand in Microeconomics
Discover the definition and formula for price elasticity of demand. See some real-world examples of how it is calculated, and find out what it means for demand of a good to be inelastic or elastic.
4. Cross Price Elasticity of Demand: Definition and Formula
Learn what cross price elasticity of demand means. Find out why business owners and economists like to know cross price elasticity, and discover how to calculate it. See some everyday examples.
5. Income Elasticity of Demand in Microeconomics
The income elasticity of demand is a useful tool that measures what happens to consumer demand for products and services when incomes change. We will work through the formula and interpret what the answers mean.
6. Price Elasticity of Supply in Microeconomics
Price is an importance concept in economics, as it is the meeting point of supply and demand. This lesson explains some of the issues with elasticity of price with respect to supply, along with some real-world examples.
Earning College Credit
Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.
To learn more, visit our Earning Credit Page
Transferring credit to the school of your choice
Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.
Other chapters within the MTTC Economics (007): Practice & Study Guide course
- Economic Concepts & Terminology
- Impact of Historical Events on the Economy
- Impact of Geography on Economics
- Structure of Local & Federal Governments
- Government & Economic Systems
- Democratic Values & Society
- Government Impact on Economics
- Basics of Measuring the Economy
- Scarcity, Opportunity Cost & Production Possibilities
- Producers & Production in Microeconomics
- Supply, Demand & Market Equilibrium
- Economic Market Structures
- Business Types & Decision Making
- Understanding Economic Growth and Productivity
- Inflation & Adjustment in Economics
- Unemployment Basics
- Understanding Inflation & Unemployment
- Overview of Aggregate Demand & Supply
- Understanding Macroeconomic Equilibrium
- Scarce Economic Resource Markets Basics
- Fiscal & Monetary Policies
- Contractionary & Expansionary Gaps
- Money & the Market
- The Central Bank & Monetary Policy
- Types of Economic Advantage
- Foreign Exchange & Trade Balance
- Overview of Inflows, Outflows & Restrictions
- International Economic Development
- Consumer Decisions in Economics
- Consumer Protection Laws & Agencies
- Savings & Investments for Personal Finance
- Effective Teaching Strategies
- Instructional Teaching Strategies
- Assessment Strategies for Teachers
- Types of Student Assessments
- Technology Uses in the Classroom
- MTTC Economics Flashcards