And it looks like they haveĪ little coffee machine in between right over here. So it's just going toīe consistently charging $1 for a can of Coke. That this vending machine right over here doesn't change. Off, the can of Coke, let's say that they cost And you see that theyīoth do sell cans of Coke. If you have a small percentage change in price. Is always going to be the exact same thing. Inelastic demand curve would look like this. What, let's say this is a quantity of 100 What this demand curve would look like, let's plot it. It was- it would be going downīy 4 over an average of 250. Going to be over your percent change in price if you It- percent change in quantity is equal to 0.
So your percentĬhange in quantity, so delta percent- I'll write Say, when you're going from a price of $5 to $1. And if you want toĭo the computation, you could look at inelas- youĬould figure out the demand elasticity for, let's Isn't going to change the demand in any way. In price within reason, within reason here, Put on a brick, it's not going to change. Within reason once again, any amount of force Of the physical analogy that we talked about Going to buy 100 vials per week, no matter what the price is. Raise it to $1 billion, then they would just wouldn'tīe able to afford it. So it's going to squeezeīuy 100 vials a week. The price went up a ton? And what happens This case, they'll still just by 100 vials. What they need in order to maintain their diabetes. Price were to go down? Let's say the price
And they're all going toīuy the insulin they need. And we have a group ofĭiabetics who need insulin. Insulation right now is going for $5 a vial. The elasticity of demand might look like for Many diabetics, not allĭiabetics, but many diabetics need to take insulin daily. Some of the more extreme cases and think about what types The price elasticity of demand, I thought I would take a look at