Jay Adrian M.

Lozano

G-12 Bezos

What I Know
1. A

2. C

3. A

4. B

5. A

6. B

7. D

8. B

9. A

10. B

11. B

12. D

13. A

14. B

15. B

ACTIVITY
Cause and Effect!

Direction: Indicate the effects of the given statements on the demand and supply of a good
based on the following situation. Write the phrase of your choice whether it Increases,
Decreases, or No change on a separate sheet of paper.
1.Increases

2.Decreases

3.Increases

4.Increases

5. No change

6. No change

7.Decreases

8.Increases

9.Decreases

10.Increases

ANALYSIS
Direction: Classify the degree of elasticity of demand of the following products as to Elastic,
Inelastic, Unitary, Perfectly elastic, or Perfectly inelastic. Cite your reason for your
classification.

DEGREE OF ELASTICITY OF DEMAND REASON FOR YOUR CLASSIFICATION

Unitary The percentage change in price is equal to the
percentage change in quantity demanded.
Inelastic The decision of the consumer to buy the
product is not affected by the increase or
decrease in price.
Perfectly inelastic The quantity demanded is the same at all
prices.
Perfectly elastic At the same price or a small change in price
may cause a huge change in quantity
demanded.
Elastic The decision of the consumer to buy the
product is affected by the increase or decrease
in price.
APPLICATION
Direction: Given the demand and supply schedule for cupcakes, accomplish the following and
write your answer on a separate sheet of paper (15 points):

Part I. Make a graph to show the demand and supply curve.

Part II. Describe the graph briefly and determine the elasticity of demand and supply.

Part III. Compute for the elasticity of demand (Ed) and elasticity of supply (Es) if the price of
cupcakes increases from P18 to P21

DEMAND

24
21

18
15

0
0 450 500 550 600
 SUPPLY

24
21

18
15

0
0 450 500 550 600

By looking the graph demand and supply curve, I could say that the elasticity of demand is
elastic because the percentage change in quantity demanded is greater than the percentage
change in price. On the other hand, the elasticity of supply is perfectly inelastic because the
quantity demanded is the same at all prices.

a. 𝐸d = Q-Q/Q+Q

𝐸d = 550 – 500/ 550+500

𝐸d =0.095/ 0.153

𝐸d = 0.0476 OR 0.48 elastic ( HOWEVER I THINK ITS INELASTIC BASE ON THE RESULT)

𝐸𝑝 = (𝑄2−𝑄1)/𝑄1 (𝑃2−𝑃1)/𝑃1

𝐸𝑝 =(550 − 500)/500/ (18− 21)/21

𝐸𝑝 =0.091/ 0.167

𝐸𝑝 = 0.6

b. Es= S-S/S+S

Es= 500-500/500+500
Es= 0 perfectly inelastic

ENRICHMENT
Direction. Answer the following questions.

Netflix subscription has been offering features to allow customers to watch movies and
television series online

1. How will Netflix subscription influence the demand for Cignal subscription?

Netflix develops its competitive advantage by producing its own original content aside from
streaming content which makes the presence of Netflix in the market will decrease the
demand for Cignal subscription. Netflix give us on-demand access to individual TV series and
movies which is a great competitor and can trigger the demand of other channel company’s
like Cignal.

2. Would the cross elasticity of demand for Netflix subscription and Cignal subscription be
negative or positive? Explain.

We can enjoy streaming to our Netflix film and series conveniently on our smartphone device
so we can watch it anywhere. It would be positive; Netflix could be a substitute for Cignal
subscription. When the price of Netfix decreases, the demand for Cignal subscription will also
decrease. The cross elasticity of demand for Netflix subscription and Cignal subscription
would be positive (+) because the two goods involved are substitute goods which means that
as the price of the substitute good increases, the demand for other goods will increase

3. Would the cross elasticity of demand for Netflix subscription with respect to high-speed
Internet service be negative or positive? Explain.

The cross elasticity of demand for Netflix subscription with respect to high speed Internet
service would be negative (-) because the two goods are complements, which means that the
demand for a good will increase when the price of a complement decreases.

Assessment
1. A

2. A

3. C

4. B

5. B

6. A

7. D

8. A

9. B

10. B

11. B

12. B

13. B

14. D

15. A