Discuss the role of prices and their effects on demand

You are the curator of a butterfly sanctuary. The sanctuary is running low on funds, so you decide to increase revenue. What options do you have to consider? Should you raise or lower the price of admission? Explain your reasoning in terms of demand and elasticity.

Respond and engage with two of your classmates.

The law of demand tells us that consumption of a product will decline following an increase in price, but the concept of elasticity helps us consider how much of a decline will occur. In this unit we will consider the concept of elasticity and the role of economists as policy advisors and how they can use their role to influence government policy to change the economic climate for the better.

Objectives:

Students will be able to discuss the role of prices and their effects on demand.

Students will be able to explain the concept of price elasticity of demand

Activities:

Read, view, and engage with Readings and Resources.

Actively participate in the Unit Discussion(s).

Complete and submit the unit assignment.

Complete and submit the unit quiz.

 READINGS AND RESOURCES

Textbook or eBook:Mankiw, G. N. (2018). Principles of Macroeconomics. Boston, MA: Cengage Learning.

Chapter 5: Elasticity and Its Applications

Chapter 6: Supply, Demand and Government Policies