Reading Guide

Chapter and sections in Taylor to Read Pg # Comments/Assignment
7 Elasticity 129

Price Elasticity of Demand 130 Read – Important

Calculating the Elasticity of Demand 131
A Possible Confusion, a Clarification, and a Warning 133
Price Elasticity of Supply 134

Calculating the Elasticity of Supply 134
Elastic, Inelastic, and Unitary Elasticity 135
Applications of Elasticity 139 Read – these are important as illustrations of elasticity

Does Raising Price Bring in More Revenue? 139
Passing on Costs to Consumers? 140
Long-Run vs. Short-Run Impact 143
Elasticity as a General Concept 144

Income Elasticity of Demand 144 Read – Important
Cross-Price Elasticity of Demand 145
Elasticity in Labor and Financial Capital Markets 146 read as background
Stretching the Concept of Elasticity 146
Conclusion 147 review
Key Concepts and Summary 147 review
Review Questions 149 optional