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Elasticity of demand measures how much demand for a product will change if the price of that product is changed. Something highly elastic will be greatly affected by price changes (something like a hotdog for example, if a vendor raises his price then demand will drop because people can go elsewhere-demand is elastic). So management must be aware of how consumers will react to price changes. Normally, lowering the price of a good will bring in more customers if the demand for that good is elastic. If it is inelastic, then a lower price will not increase demand much.
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What effect does the availability of many good substitutes have on the elasticity of demand for a good?
Demand is elastic
Conclusion of price elasticity of demand?
The conclusion of the price of elasticity of demand is the effect of price change based on the revenue it receives. It is based off the demand of the product and the price of the product.
An elasticity measure less than one means that demand is what?
for elasticity less than one the demand will be inelastic, i.e there will be very less effect of price on the demand.It will be relative inelastic or inelastic.
Why demand curve is horizontally curve?
horigontal demand curve means perfectly elasticity..i.e ed=infinity.in this case price is fixed and what ever change in demand will not effect the price.it can be said that supply of good in not limited in this case..i.e why it not effect the price with change in demand.
What is the cross elasticity of demand if two commodities are substitute and if two commodites are complement of each other?
cross effect is positive in substitution effect and negative in complementry goods
What effect does the availability of many good substitutes have on the elasticity of demand for a good?
Demand is elastic
Conclusion of price elasticity of demand?
The conclusion of the price of elasticity of demand is the effect of price change based on the revenue it receives. It is based off the demand of the product and the price of the product.
What factors affect elastic of demand?
There are plenty of factors affecting elasticity of demand including climate of the area. Other factors that effect elasticity of demand include supply and group of people buying.
An elasticity measure less than one means that demand is what?
for elasticity less than one the demand will be inelastic, i.e there will be very less effect of price on the demand.It will be relative inelastic or inelastic.
What is the effect of temperature on elasticity?
effect of temperature on elasticity
Why demand curve is horizontally curve?
horigontal demand curve means perfectly elasticity..i.e ed=infinity.in this case price is fixed and what ever change in demand will not effect the price.it can be said that supply of good in not limited in this case..i.e why it not effect the price with change in demand.
What has the author P Cumperayot written?
P. Cumperayot has written: 'Analysis of the effect of demand elasticity on spot prices for electricity'
What is the cross elasticity of demand if two commodities are substitute and if two commodites are complement of each other?
cross effect is positive in substitution effect and negative in complementry goods
What is the definition of perfect elastic?
AKA Infinite elasticity of demand. Means a change in price will not effect quantity demanded. Such as necessary goods/services to survival.
What questions is the price elasticity of demand designed to answer?
Price elasticity of demand is used to determine how changes in price will effect total revenue. If demand is elastic(>1) a change in price will result in the opposite change in total revenue.(+P=-TR) When demand is unit elastic(=1) a change in price wont change total revenue. If demand is inelastic a change in price will result in a change in total revenue in the same direction.(+P=+TR)
What effect would a rule stating that university students must live in university dormitories have on price elasticity of demand for dormitory space?
This would make the demand on dormitories go up significantly, so prices would go up in correlation with demand.
How does elasticity effect the tax incidence?
Tax incidence (the distribution of the tax burden among the buyers and sellers in a market) depends on the elasticity of demand and supply because elasticity measures the buyer and seller's willingness to leave the market when the prices of goods change. The more elastic demand/supply is, the more buyers/sellers will leave the market when the prices rise.Therefore, the tax burden falls more on the side of the market with the smaller elasticity, because a small elasticity means that more buyers/sellers remain in the market when the prices rise due to their being fewer available alternatives.
