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M02.L05 — Demand in Australian Markets: Case Studies

Module: Module 02 — Demand and Willingness to Pay
Lesson: L05 of 05
Duration: ~30 minutes
Level: Introductory
Provenance: Principles of Microeconomics (Curtis and Irvine) | Microeconomics 1e (Medeiros)

Learning Objective

Apply demand analysis to Australian market case studies.

Case 1: Sydney Housing Demand

Drivers: Population growth, low interest rates, foreign investment. Demand is price inelastic (limited substitutes). COVID-19 shifted preferences to suburbs.

Case 2: Electricity Demand

Inelasticity: Essential service; price hikes (e.g., 2022 energy crisis) reduce consumption minimally. Time-of-use pricing attempts to shift peak demand.

Case 3: Food Delivery Platforms

Demand Shifters: Pandemic lockdowns (↑), reopening (↓). Uber Eats competes with Deliveroo; cross-price elasticity matters.

Case 4: Iron Ore Exports

China Demand: Price volatility tied to Chinese construction. Australian miners face export demand kinks at price thresholds.

Common Misconception

"Inelastic demand means demand doesn’t change."

Inelastic means quantity changes less than price (% terms), not zero change.

Key Takeaways

  • Sydney housing: Inelastic, shifted by demographics.
  • Electricity: Essential but modifiable via pricing.
  • Food delivery: Elastic to substitutes and income.
  • Iron ore: Export demand drives price sensitivity.

Practice

  1. Why is Sydney housing demand inelastic?
  2. How might solar adoption affect electricity demand elasticity?
  3. Compare COVID impacts on food delivery vs. iron ore demand.

Further Resources

Provenance: Principles of Microeconomics (Curtis and Irvine) | Microeconomics 1e (Medeiros)