Area Walk

Elasticity is the responsiveness of demand or supply to the changes in prices or income. There are various formulas and guidelines to follow when trying to calculate these responses. For instance, when the percentage of change of the quantity demanded is greater then the percentage change in price, the demand is known to be price elastic. On the other hand, if the percentage change in demand is less than then the percentage change in price; Like that of demand, supply works in a similar way. When the percentage change of quantity supplied is greater than the percentage change in price, supply is know to be elastic. When the percentage change of quantity supplied is less then the percentage change in price, then the supply then demand is known to be price inelastic.

The following text is real world examples of these economic principles. They have been provided to build a bridge between current economic situations and economic principles of elasticity.

The Demand for Lotto: The Role of Conscious Selection

In this article is a discussion about the elasticity of demand for lottery tickets. Time series data was used in a way in which the expected value of the lottery ticket would vary due to rollovers (Farrel 1). It was found that there are far more rollovers than expected given the lottery design (Farrel 1). There was also some strong evidence found that supported that individuals did not pick their numbers in a un...

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