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The elasticity of demand for a good is influenced by several factors, including the availability of substitutes, the proportion of income spent on the good, and the necessity versus luxury nature of the product. If there are close substitutes available, demand tends to be more elastic; consumers can easily switch if prices rise. Conversely, necessities with fewer substitutes are often inelastic, as consumers will continue to purchase them regardless of price changes. Additionally, goods that constitute a small portion of a consumer's budget typically have more inelastic demand.
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When the price of a good will cause total revenue to fall if price elasticity of demand is elastic or inelastic?
when price changes it is called inelastic demand and when quantity of demand change that is called elastic of demand.
What are the factors responsible for abnormal demand curve?
Several factors can lead to an abnormal demand curve, including changes in consumer preferences, shifts in income levels, fluctuations in the prices of related goods, and variations in consumer expectations. Additionally, external factors such as advertising, government policies, and seasonal trends can also impact demand curves. These factors can cause the demand curve to shift or become more elastic or inelastic, deviating from the typical downward-sloping demand curve.
Is gold price elastic or inelastic?
when gold is relatively cheap, people will buy lots of gold jewellery, when the price of gold goes up, people switch to silver jewellery...sowhen the price goes up, less people will want to buy - cause the demand is "sensitive" to the price...so demand is ELASTIC...
A price decrease will cause total revenue to fall if?
demand is inelastic
What is the importance of elasticity of demand and supply?
Elasticity of demand to firms are important because they represent the nature of the goods they are dealing in. For example if a firm produces goods with inelastic demand they will be able to earn high profits because even if they increase the price of the goods, since the change in demand will be less than the change in price. Also if there is a tax they will share less of the burden. This means they can keep prices high and not have to worry about a lot of things. However, if a firm were to produce goods with elastic demand, then they will have to make sure the price of the good remains low and if there is a tax they will be the ones who share the majority of the burden.
When the price of a good will cause total revenue to fall if price elasticity of demand is elastic or inelastic?
when price changes it is called inelastic demand and when quantity of demand change that is called elastic of demand.
The difference between a elastic and inelastic demand?
Elastic demand changes according to some other factor. The demand for holdiay trees is elastic throughout the year because there is only damand during the winter season. Inelastic demand is constant. As you might have guessed, the demand for gasoline is inelastic because most families need a constant supply. Even during the so-called summer driving season, the uptick in demand is going to remain the same, unless prices cause what is called "demand destruction." This is what happened during 2009.
What are the factors responsible for abnormal demand curve?
Several factors can lead to an abnormal demand curve, including changes in consumer preferences, shifts in income levels, fluctuations in the prices of related goods, and variations in consumer expectations. Additionally, external factors such as advertising, government policies, and seasonal trends can also impact demand curves. These factors can cause the demand curve to shift or become more elastic or inelastic, deviating from the typical downward-sloping demand curve.
Is gold price elastic or inelastic?
when gold is relatively cheap, people will buy lots of gold jewellery, when the price of gold goes up, people switch to silver jewellery...sowhen the price goes up, less people will want to buy - cause the demand is "sensitive" to the price...so demand is ELASTIC...
A price decrease will cause total revenue to fall if?
demand is inelastic
When can a commodity be completely inelastic?
Never. According to every economics textbook in existence, an "elastic" commodity is one where a one-percent price delta causes at least a one-percent demand delta. An "inelastic" commodity is one where a one-percent price delta causes less than a one-percent demand delta, and a "completely inelastic" commodity is one where demand doesn't change regardless of price changes. Here's reality: there is not one product in this world that you can increase the price of and not cause demand to fall.
What is the importance of elasticity of demand and supply?
Elasticity of demand to firms are important because they represent the nature of the goods they are dealing in. For example if a firm produces goods with inelastic demand they will be able to earn high profits because even if they increase the price of the goods, since the change in demand will be less than the change in price. Also if there is a tax they will share less of the burden. This means they can keep prices high and not have to worry about a lot of things. However, if a firm were to produce goods with elastic demand, then they will have to make sure the price of the good remains low and if there is a tax they will be the ones who share the majority of the burden.
If a product has a inelastic demand a price increase will cause?
I assume you mean that the demand is inelastic? If so, then the consumer will buy the same amount and pay the higher price. The usual example of this would be insulin (assuming you need a fixed amount to live and there are no alternatives)
What is the factors that may cause the decrease in ice-cream?
what is the factors that may cause a decrease in the demand of ice-cream
What is determinants of demand?
Determinants of demand which are sometime also called as demand shifters is a number of factors that when they change they will cause the demand curve to shift.
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.
Demand shifters is a number of factors that when they change they will cause the demand curve to shift. True or False?
True
