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The Effect Of The Price Elasticity Of Demand

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Demand is the “total quantity customers are willing and able to purchase” (Shah, 2017)1, looking at the price elasticity of demand determines how much a product is priced and how responsive demand is to the change of that price. For example, 500 people will be willing to pay £15 for a concert ticket, however if the price of the ticket was increased to £25, then only 250 people would be willing to pay. This can be shown using a demand curve, which is based upon the principle that if the price of a product increases, then the quantity will decrease and vice versa. This is why a demand curve is a negative slope.

Price elasticity of demand, measures how much a change in price can affect the quantity demanded. This can be calculated using the …show more content…
Over-time people may be able to integrate the extra 7 minutes of travel into their routine, or find other substitutes, causing demand for the bridge to be become elastic. However, this would likely not happen as looking at the average income for Leigh Woods residents (STATS AND REFERENCES) it is higher than the UK average income (STATS AND REFERENCES). This shows that users have more disposable income and would class the £1 toll charge as a necessity as opposed to a luxury. This is another determining factor of price elasticity. Using the toll bridge is a necessity that they would be willing to pay more …show more content…
6 October.
Zhu, Y. (2017) Economics for Events and Marketing Lecture 3: Price Elasticity of Demand [lecture to BSC Business Management with Marketing Year 1], University West of England. 6 October.
University of the West of England (2017) Student and staff numbers. Available from: http://www1.uwe.ac.uk/about/factsandfigures/studentandstaffnumbers.aspx [Accessed 15th October 2017].
University of Bristol (2016) Facts and figures. Available from: http://www.bristol.ac.uk/university/facts/ [Accessed 15th October 2017].
Visit Bristol (No date) Clifton Suspension Bridge. Available from: https://visitbristol.co.uk/things-to-do/clifton-suspension-bridge-p24661 [Accessed 15th October 2017].
South West Business (2013) Clifton Suspension Bridge toll rise inquiry: price will have gone up 400 per cent in 10 years. Available from: http://www.southwestbusiness.co.uk/news/31052013091044-clifton-suspension-bridge-toll-rise-inquiry--price-will-have-gone-up-400-per-cent-in-10-years/ [Accessed 15th October 2017].
Sloman, J. (2014) Price changes for travellers in Bristol. The Sloman Economics News Site. Available from: http://pearsonblog.campaignserver.co.uk/ [Accessed 13 September

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