ECNC 213 Lecture Notes - Lecture 10: Demand Curve, Almond Milk, Soy Milk

45 views8 pages

skyturtle317

12 Oct 2016

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Chapter 4: elasticity: the price elasticity of demand, price elasticity of demand: the responsiveness of quantity demanded to the price change. Measure it in terms of percentage change in quantity demanded over the percentage change in price (% qd/% p) For example, price increases by 5% and quantity demanded. For example, price decreases by 5% and quantity demanded increases by 2: factors determinate the price elasticity of demand: : which demand is relatively elastic, the demand. : would you care that the price of a new car that. : would you care that the price of salt decreases by. The share of the budget: a large share, more elastic. : what kind of car would you purchase if the. : what would you do if your gas tank is almost. : what would you do if the rent of your apartment. More elastic: computing the price elasticity of demand (ed), ed = % qd/% p.

Related Questions

Discussion #1

The law of demand states that a fall in the price of a good raises the quantity demanded, and the increase in price leads to a decrease in quantity demanded. The price elasticity of demand measures the responsiveness of the quantity demanded to a change in price. Demand for a good is said to be elastic if the quantity demanded responds substantially to changes in the price, and the percentage change in quantity demanded is greater than the percentage change in price. Demand is said to be inelastic if the quantity demanded responds only slightly to changes in the price, which indicates that the percentage in price is greater than the percentage in quantity demanded.

However, the extent of responsiveness of quantity demanded to a change in price depends on the nature of a particular good or service in the market. The price elasticity of demand partly depends on the availability of close substitutes. When a large number of substitutes are available, consumers respond to a higher price of a good by buying more of the substitute goods and less of the relatively more expensive good. In addition, goods or services that are considered necessities tend to have less elastic (more inelastic) demand, whereas goods or services that are considered luxuries have more elastic (less inelastic) demands.

Explain why the demand for the good or service provided by the organization you work for is elastic or inelastic. How does this influence pricing decisions?
Provide examples on how the availability of close substitutes affects price elasticity of demand.
Give specific examples of necessities or luxuries, and explain how they affect price elasticity of goods or services.

Please answer ALL bulletins and place the answers under the correct bulletin.

A Steel Supply and Demand for the USA are given by Demand: P = 1200 - 100 (QD) and supply: P = 100 (QS) where QD = quantity demanded and QS = quantity supplied

Compute the price elasticity of demand when the price is $800.

What can you say about the demand?

Compute the price elasticity of demand between $200 and $900.

Is the demand elastic or inelastic?

raspberryant872

1. The concept of price elasticity of demand measures:

a. the slope of the demand curve.

b. the number of buyers in a market.

c. the extent to which the demand curve shifts as the result of a price decline.

d. the sensitiveness of quantities demanded to price changes.

2. When the percentage change in price is less than the resulting percentage change in quantity demanded:

a. demand is elastic.

b. demand is inelastic.

c. demand is unit elastic.

d. none of the above.

3. The elasticity of demand:

a. will be the same at each price-quantity combination on a stable demand curve.

b. tends to be elastic in high-price ranges and inelastic in low-price ranges.

c. tends to be inelastic in high-price ranges and elastic in low-price ranges.

d. is infinitely large for a perfectly inelastic demand curve.

4. Suppose that as the price of Y falls from $2.00 to $1.80 the quantity of Y demanded increases from 110 to 121. It can be concluded that the price elasticity of demand is: _______.

5. Total revenue rises as the price of a good increases if price elasticity of demand is:

a. unitary elastic

b. perfectly inelastic.

6. The demand for such products as salt, bread, and electricity tend to be:

a. relatively price elastic.

b. relatively price inelastic.

c. of unit price elasticity.

d. perfectly price elastic.

coffeeelephant81

ECNC 213 Lecture Notes - Lecture 10: Demand Curve, Almond Milk, Soy Milk

Document Summary

Get access

Related Documents

ECNC 213 Lecture Notes - Lecture 11: Price Gouging, Price Ceiling, Rent Regulation

Related Questions