IBDP Economics Chapter 3 Notes

elasticities

STUDY NOTES FOR ECONOMICS CHAPTER 3 – ELASTICITIES

These notes have specially been curated by expert teachers to simplify and enlighten concepts given in IB Elasticities HL. The notes are comprehensive in nature and are sufficient to study the chapter in depth and one need not look for other resources beyond the notes provided on our website which can be accessed for free. The notes for Elasticities IBDP HL are available on our official website and can be downloaded for free. The material made available on Tychr’s website is available for all IBDP subjects and is specially curated after an extensive amount of effort to ensure that the notes are in consonance with the IB curriculum and are an amalgamation from various textbooks prescribed by the IBO.

In this chapter of Elasticities we look at the elasticities of demand and supply. First we look at the elasticity of demand which has three concepts: price elasticity, cross elasticity, and income elasticity. Numericals pertaining to the price elasticity are taught in this chapter to give a more mathematical background to the concept of elasticity. Degrees of price elasticity along with their curves are explained in detail to give a fair idea as to how price determines the elasticity of demand. In addition to this the variability of the price elasticity of demand is also shown along a straight line demand curve. The various factors affecting the price elasticity of demand are also explained like the nature of the commodity, substitute, proportion of income, time period etc. We look at the cross elasticity of demand.

The numerical and the curves help in the better understanding of the concept. Application of cross-price elasticity of demand in cases of substitute goods and complementary goods are also taught. Income elasticity of demand talks about two types of goods: normal goods and inferior goods. All the three concepts of elasticity of demand help in the better understanding of the concept of demand. Similarly, we also look at elasticity of supply and the types of price elasticity of supply. The diagrams for the same are very crucial to understand this chapter and the concepts mentioned. Lastly, this chapter talks about the determinants of the price elasticity of supply, factors affecting elasticity of supply, importance and application of elasticity of supply. This chapter focuses more on numerical and graphs and thus the student should practice them in order to gain good grades.