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Cross elasticity of supply is defined as the responsiveness of the supply of good A to a change in the price of good B. Using an example of a farmer who grows both potatoes and carrots the cross elasticity of supply of carrots against potatoes is how much supply of carrots will change if the price of potatoes changes.
Many may see carrots and potatoes as being substitutes for each other and therefore it would be a safe assumption that as the price of potatoes increases, the supply of carrots falls. This is because the farmer now uses more land to produce potatoes and less to produce carrots.
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How is quantity affected by price changes?
supply elasticity
Would the concepts of cross elasticity of cross elasticity of demand and income elasticity of demand be of any interest to a pharmaceutical company?
I am at a loss for the answer please help me.
Cross elasticity of demand?
In economics , the cross elasticity of demand and cross price elasticity of demand measures the responsiveness of the quantity demand of a good to a change in the price of another good.
Why study elasticity of demand and supply?
We have to study the elasticity of demand and supply so that we can know what we want to know.
Uses of cross elasticity of demand?
Cross elasticity in economics, also referred to as cross-price elasticity is used to measure the changes of the demand of a certain commodity to the price changes of another good.
What is unitary elasticity supply?
A unitary-elastic supply indicates a good with a supply-price elasticity of one, which means that a 1% change in price increases supply by 1%.
In economics what are the types of elasticity?
price elasticity income elasticity cross elasticity promotional elasticity
What are the 3 types of elasticity?
1)price elasticity of demand 2)income elasticity of demand 3)cross elasticity of demand
Point elasticity of supply?
The point elasticity of supply is a measure of the rate of response of quantity demand due to a price change. The higher the elasticity, the more sensitive the sellers are to these changes.
What is the primary determinant of elasticity of supply?
A key determinant of the price elasticity pf supply is the availability of alternative products. The more choices consumers have, the more elasticity the price must have.
What factor had the greatest influence on elasticity and in elasticity of supply?
Demand from consumers.
When supply is relatively inelastic elasticity of supply es?
zero
