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Aggregate supply curve is perfectly inelastic an increase in agregate demand will lead to?
Nadialakhani
Inflation.
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∙ 11y ago
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Why doesn't an increase in aggregate demand translate directly into an increase in real GDP?
Why doesn't an increase in aggregate demand translate directly into an increase in real GDP
What will happen if there is an increase in demand for a product who's supply is perfectly elastic?
The quantity of the the products bought tends to fluxuate a lot. The prices tend to stay somewhat stable. It is opposite for inelastic demand,
Using the concept of elasticity explain how a tax on gasoline would affect firms and consumers Who would pay the larger burden of the tax?
First, a quick discussion on elasticity of demand:When demand for an item is perfectly elastic, as prices increase the demand for the item decreasesWhen demand for an item is perfectly inelastic as prices increase the demand for the item does not changeIn the real world, few items are perfectly elastic or perfectly inelastic. Gasoline is an interesting item when it comes to elasticity. Gas is nearly perfectly inelastic at some levels of consumption because most people need to use it to get to work. This is starting to change however because as technology develops alternative fuels gas may become much more elastic. At some levels of consumption gas becomes elastic, for example if prices are too high some people will choose to skip a vacation soas not to consume gas.Now to explain elasticity of demand and taxes:When demand is perfectly inelastic, all of the tax will be passed on to the consumer.When demand is perfectly elastic, all of the tax will be passed on to the to the producer.So now to answer the question as to who would pay the larger burden of the tax. Right now (11/2009) gasoline is much more inelastic than it normally is (although it usually is still quite inelastic). For this reason, the majority of the tax on gasoline will be paid by the consumer.
Which products included in the case of demand curve is inelastic and supply curve is perfectly elastic?
Some of the products which are considered perfectly inelastic are rice, fish, meat, etc., or in short is our basic nessecities. These products are under the perfect competetive market structure that's why if the firms increase its price still, the consumers are tend to buy it cause they dont have other choice but its substitute goods. Some of the products which are considered perfectly inelastic are rice, fish, meat, etc., or in short is our basic nessecities. These products are under the perfect competetive market structure that's why if the firms increase its price still, the consumers are tend to buy it cause they dont have other choice but its substitute goods.
An increase in interest rates affects aggregate demand by?
An increase in interest rates decreases the aggregate demand shifting the curve to the left.
Why doesn't an increase in aggregate demand translate directly into an increase in real GDP?
Why doesn't an increase in aggregate demand translate directly into an increase in real GDP
What will happen if there is an increase in demand for a product who's supply is perfectly elastic?
The quantity of the the products bought tends to fluxuate a lot. The prices tend to stay somewhat stable. It is opposite for inelastic demand,
Using the concept of elasticity explain how a tax on gasoline would affect firms and consumers Who would pay the larger burden of the tax?
First, a quick discussion on elasticity of demand:When demand for an item is perfectly elastic, as prices increase the demand for the item decreasesWhen demand for an item is perfectly inelastic as prices increase the demand for the item does not changeIn the real world, few items are perfectly elastic or perfectly inelastic. Gasoline is an interesting item when it comes to elasticity. Gas is nearly perfectly inelastic at some levels of consumption because most people need to use it to get to work. This is starting to change however because as technology develops alternative fuels gas may become much more elastic. At some levels of consumption gas becomes elastic, for example if prices are too high some people will choose to skip a vacation soas not to consume gas.Now to explain elasticity of demand and taxes:When demand is perfectly inelastic, all of the tax will be passed on to the consumer.When demand is perfectly elastic, all of the tax will be passed on to the to the producer.So now to answer the question as to who would pay the larger burden of the tax. Right now (11/2009) gasoline is much more inelastic than it normally is (although it usually is still quite inelastic). For this reason, the majority of the tax on gasoline will be paid by the consumer.
Which products included in the case of demand curve is inelastic and supply curve is perfectly elastic?
Some of the products which are considered perfectly inelastic are rice, fish, meat, etc., or in short is our basic nessecities. These products are under the perfect competetive market structure that's why if the firms increase its price still, the consumers are tend to buy it cause they dont have other choice but its substitute goods. Some of the products which are considered perfectly inelastic are rice, fish, meat, etc., or in short is our basic nessecities. These products are under the perfect competetive market structure that's why if the firms increase its price still, the consumers are tend to buy it cause they dont have other choice but its substitute goods.
An increase in interest rates affects aggregate demand by?
An increase in interest rates decreases the aggregate demand shifting the curve to the left.
If the demand for a good is inelastic and the price of the good decreases?
Increase. Inelastic demand means that most consumers will continue to buy a good regardless of price.
If a price increase has little or no effect the demand for the product is?
When a price increase has little or no effect on the demand for a product, it is inelastic.
When the price of a product rises and the total revenue of sellers increase?
You have an inelastic product.
What will happen if Aggregate demand increases and aggregate supply decreases?
An increase in aggregate demand and a decrease in aggregate supply will result in a shortage: there will be more goods and services demanded than that which is being produced.
What will happen if Aggregate demand increases and aggregate supply increases?
An increase in aggregate demand and a decrease in aggregate supply will result in a shortage: there will be more goods and services demanded than that which is being produced.
Which is true If the demands for a product is inelastic?
a price increase does not have a significant impact on buying habits
Type of demand in which consumers keep buying a good despite a price increase?
Inelastic :)
