Embedded Files
"The law of supply states that 'when price rises, quantity supplied rises', but what about their relative rises?"
↓
"When there was a huge INCREASE IN THE DEMAND FOR LABUBU DOLLS, what do you think increased the most, the PRICE or the QUANTITY?"
↓
↓
↓
"Well, given the rapid global expansion of PopMarts, you should realise that QUANTITY has increased faster than PRICE."
↓
↓
↓
"What if we now focus on an INCREASE IN THE DEMAND FOR A-LEVELS IN HONG KONG? "Do you think QUANTITY will again increase more than PRICE?"
↓
↓
↓
"Unlikely, right, for so many reasons, such as the availability of actual space and the red tape must be mindblowing, so you should realise that QUANTITY has increased at a much slower rate than PRICE."
↓
↓
↓
--2.3.1 DEFINITION--
--2.3.1 DEFINITION--
"We can measure how responsive quantity supplied this using PRICE ELASTICITY OF SUPPLY (PES), which is defined as follows:
↓
"Price Elasticity of Supply (PES) measures how responsive the quantity supplied of a good or service is to a change in its price."
↓
--2.3.2 FORMULA--
--2.3.2 FORMULA--
"The formula: PES = %ΔQS ÷ %ΔP
↓
"However, there are two methods to calculate '%Δ', but it is the POINT METHOD that is used in the A-LEVEL. Can you see why the MIDPOINT METHOD may be preferred?"
↓
--2.3.3 SIGNIFICANCE OF VALUES--
--2.3.3 SIGNIFICANCE OF VALUES--
--TASK--
"Use the interactive diagram below to complete this paragraph."
↓
"Clearly PES is a quotient and therefore the result of a numerator ('%ΔQS') divided by a denominator ('%ΔP') as such if the numerator is GREATER than the denominator, then the value ('responsiveness') will be____, and is termed____, and if the numerator is LESS than the denominator, then the value ('responsiveness') will be____, and is termed____, and if the numerator is EQUAL TO the denominator, then the value ('responsiveness') will be____, and is termed____, ."
↓
--2.3.4 FACTORS AFFECTING PES--
--2.3.4 FACTORS AFFECTING PES--
"I'm pretty sure you have a good idea what makes some goods more responsive than others, so let's start ranking!"
↓
↓
↓
"What do you notice about the type of products at the top of the ranking compared to the bottom?"
↓
↓
↓
"That's right, the top-ranked most elastic products are almost entirely MANUFACTURED, whilst the lower, more inelastic products are SERVICES, any thoughts why?"
↓
↓
↓
--RWE SERVICE EXAMPLE--
↓
"When demand for the English Premier League increased and ticket prices started to rise, we were really responsive by increasing our seating capacity... it only took 4 years."
"Can 4-year seating capacity changes ever be considered price elastic?"
↓
↓
↓
--RWE MANUFACTURED EXAMPLE--
↓
"How quickly can branded sunglasses be produced?" "Can you have a guess?" (Skip to 58.17)
↓
↓
"Here are all the main factors that influence the PES."
↓
--TASK--
"Using the infographic above, explain (use at least two factors each) why the PES of international schools is inelastic, while the PES of 759-type stores are realtively elastic in HK."
--2.3.5 IMPLICATIONS FOR FIRMS--
--2.3.5 IMPLICATIONS FOR FIRMS--
Page updated
Google Sites
Report abuse