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Subject: Economics
Semester: 1
Period: 1
Week: 5
School Name:
Teacher’s Name:
Subject: Economics
Grade Level: Grade 11
Week & Period: Week 5, Period I
Date:
LEARNING OBJECTIVES
By the end of the lesson, learners should be able to:
- Identify and explain the key determinants of price elasticity of demand (PED).
- Identify and explain the determinants of price elasticity of supply (PES).
- Analyze how these determinants affect pricing decisions in real markets.
- Evaluate how elasticity affects the responsiveness of consumers and producers to price changes.
INSTRUCTIONAL MATERIALS
- Charts of elasticity graphs
- Demand and supply curves
- Case studies from agricultural markets
- Videos or simulations of pricing behavior
- Worksheets and calculators
ANTICIPATION (Warm-Up)
Pose the question:
“Why is the demand for salt not affected much even when the price increases, but a small increase in phone prices reduces demand greatly?”
Guide the discussion toward price elasticity and its determinants.
MAIN LESSON: BUILDING KNOWLEDGE
- Determinants of Price Elasticity of Demand (PED)
- Availability of Substitutes:
- The more substitutes available, the more elastic demand becomes.
- g., Cola drinks.
- Nature of the Commodity:
- Necessities (inelastic) vs Luxuries (elastic).
- g., Bread vs Jewelry.
- Proportion of Income Spent:
- Products taking larger income share are more elastic.
- Time Period:
- Demand becomes more elastic in the long run.
- Addictiveness of Goods:
- Addictive goods (e.g., cigarettes) have inelastic demand.
- Determinants of Price Elasticity of Supply (PES)
- Time Factor:
- Long run supply is more elastic than short run.
- Availability of Inputs:
- Easily available inputs make supply more elastic.
- Mobility of Factors of Production:
- If factors can be easily shifted, supply becomes more elastic.
- Spare Capacity in Firms:
- More spare capacity = More elastic supply.
- Ability to Store Stock:
- Durable and storable goods have more elastic supply.
- Application & Examples
Example 1:
- The demand for petrol remains relatively the same even when prices rise → Inelastic due to lack of substitutes.
Example 2:
- A bumper harvest of tomatoes causes prices to fall steeply → Supply is elastic because farmers cannot store fresh produce long-term.
ACTIVITIES
- In groups, students will identify goods with elastic and inelastic demand from household settings.
- Use real-life price and supply data to analyze responsiveness and categorize them.
- Class debate: “Is it better for businesses to operate with elastic demand or inelastic demand?”
ASSESSMENT (Formative Questions)
- List and explain any 3 determinants of price elasticity of demand.
- What makes the supply of agricultural goods inelastic in the short term?
- Discuss why luxury goods are price elastic.
- Identify two factors that affect price elasticity of supply.
- Differentiate between short-run and long-run elasticity in supply.
HOMEWORK
- Choose two goods from your home (e.g., rice and soda) and research their price elasticity.
- Write a paragraph each on the factors influencing their demand and supply elasticity.
- Include one real-world news example (from a newspaper or internet) showing a price change and how consumers responded.
EXPANDED NOTES
- In policy-making, knowledge of elasticity helps governments decide where to impose taxes.
- Producers study elasticity before changing prices.
- Elasticity helps predict consumer behavior and market response.
DIFFERENTIATION STRATEGIES
- Provide extra illustrations for slow learners.
- Use relatable products and group work for practical understanding.
- Visual aids like graphs, simulations, and case studies for active learners.
TEACHER’S REFLECTION
- Did students understand the connection between elasticity and real-life pricing?
- Were they able to explain determinants using examples?
- Should additional practice on graph interpretation be scheduled?