Elasticity and Incentives Answers

excess supply✔ excess demand

✔ too many too few

✔ more less

Now, use this demand curve to help you answer these questions about the customers at Bond's Gym. Pay attention to the fact that applications rise greatly as prices drop. The demand for memberships at Bond's Gym can be considered . Monthly memberships at Bond's Gym can be considered a .

Bond's Gym is not able to expand quickly. It would take a long time and lots of money to hire more workers, buy equipment, and find a bigger building. Based on the graph and the information above, memberships at Bond's Gym are an supply. The owner at Bond's Gym increase the supply of memberships easily and quickly.

Bond's Gym should use to help solve the problem. If the owner of Bond's Gym raises his prices, the demand for membership will most likely . If the owner of Bond's Gym decides to raise his prices, he could make money per monthly membership.

What will most likely occur after the price of a monthly membership increases? Check all that apply.

✔ decrease increase