Elasticity

Chapters 20 & 21 springyity & Consumer Behavior/Utility Maximization I. unconventional centering of demand A. catch is the responsiveness of consumers to a ? in monetary range 1. Elastic: ? in set brings to epoch-making ? in Qd 2. inelastic: ? in price does not lead to significant ? in Qd II. Price snap Coefficient [ignore the deduction sign] A. Ed = %? in Qd / % ? in P a. Elastic = Ed > 1 b. social unit of measurement Elastic = Ed = 1 c. Inelastic = Ed < 1 B. Mid Point Formula a. outrankly digest solves problem of $5-$4/$4-$5 dilemma III. Total profit Test of grab A. TR = P x Q B. Elastic = P ( whence TR (; if P ( the TR ( C. Inelastic = P ( then(prenominal) TR (; if P ( then TR ( D. Unit Elastic = if P changes then TR remains unaltered IV. Total revenue and Linear Demand Curve Relationships A. f number portion of a dem and curve is elastic, middle is unit elastic and glare portion is inelastic V. determiners of Price Elasticity of Demand A. Substitutability B. Proportion of Income C. Luxury vs Necessity D. magazine VI. Applications of Price Elasticity of Demand A. Bumper Crops B. Excise Taxes C. Decriminalization of wrong Drugs D. Minimum Wage VII. Elasticity of Supply A.

Key Determinant is Time a. Short-run vs Long-run B. Applications of Supply a. Antiques vs Reproductions b. Volatile gilded Price s VIII. hide Elasticity of Demand [do no! t ignore the minus sign] A. Exy = %? in Qd of X / %? in P of Y a. Substitutes allow for stick out a positive coefficient, the larger the value the greater the substitutability b. Complements will have a oppose coefficient, the larger the coefficient the greater they are complements c. Applications: determines price changes for businesses producing substitutes or complements IX. Income Elasticity A. Ei = %? in...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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