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Chapter 4
Applications of Supply
and Demand
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T-25
Figure 4-1
Elastic Demand Shows Large-
Quantity Response to Price Change
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Price Elasticity of Demand Falls
into Three Categories
T-26
Figure 4-2
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Perfectly Elastic
and Inelastic Demands
T-27
Figure 4-3
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Slope and Elasticity
Are Not the Same Thing
T-28
Figure 4-4
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A Simple Rule for Calculating
the Demand Elasticity
T-29
Figure 4-5
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Supply Elasticity Depends upon
Producer Response to Price
T-30
Figure 4-6
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Prices of Basic Farm Products
Have Declined Sharply
T-31
Figure 4-7
Source,Bureau of Labor Statistics
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Agricultural Distress Results from Expanding
Supply and Price-Inelastic Demand
T-32
Figure 4-8
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Crop-Restriction Programs Raise
Both Price and Farm Income
T-33
Figure 4-9
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Gasoline Tax Falls on Both
Consumer and Producer
T-34
Figure 4-10
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Effects of a Minimum Wage
T-35
Figure 4-11
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Price Controls Produce Shortages
T-36
Figure 4-12