0
When demand increases and supply is perfectly elastic what will be the effect?
Wiki User
∙ 11y ago
there will be no change in price because as demand will increase supply will also increase.
Wiki User
∙ 11y ago
Add your answer:
Earn +20 pts
What effect does the availability of many good substitutes have on the elasticity of demand for a good?
Demand is elastic
Does the existence of a bandwagon effect makes demand more price elastic at each price?
Yes, it certsinly does. The demand curve will be more elastic if there is a bandwagon effect than if the demand is based only on the functional attributes of the commodity. "BANDWAGON, SNOB, AND VEBLEN EFFECTS IN THE THEORY OF CONSUMERS' DEMAND" (Leibenstein, 1950)
How will demand effect price and quantity?
High Demand Lowers QuantityLow Demand increases price and quantity
What is a price cut when the demand for a normal good is price inelastic?
Demand is inelastic when changes the in price of a commodity do not effect (or have very little effect) the quantity of that product demanded. For most commodities, demand decreases with price increases and demand increases with price decreases.
Why demand for soft drink as a whole inelastic but demand for Coca Cola is elastic?
the demand for cold drink as whole is inelastic bcoz the price wont have much effect on its demandbt price for coca cola is elastic because if pric of coca cola will increase then its substitute pepsi is available
What effect does the availability of many good substitutes have on the elasticity of demand for a good?
Demand is elastic
Does the existence of a bandwagon effect makes demand more price elastic at each price?
Yes, it certsinly does. The demand curve will be more elastic if there is a bandwagon effect than if the demand is based only on the functional attributes of the commodity. "BANDWAGON, SNOB, AND VEBLEN EFFECTS IN THE THEORY OF CONSUMERS' DEMAND" (Leibenstein, 1950)
How will demand effect price and quantity?
High Demand Lowers QuantityLow Demand increases price and quantity
What is a price cut when the demand for a normal good is price inelastic?
Demand is inelastic when changes the in price of a commodity do not effect (or have very little effect) the quantity of that product demanded. For most commodities, demand decreases with price increases and demand increases with price decreases.
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.
Why demand for soft drink as a whole inelastic but demand for Coca Cola is elastic?
the demand for cold drink as whole is inelastic bcoz the price wont have much effect on its demandbt price for coca cola is elastic because if pric of coca cola will increase then its substitute pepsi is available
What is income effect mean?
The income effect is the change in the individualâ??s income and how it will impact the change in quantity of a service. As the income increases, the quantity of demand of service also increases.
If US motorcycle productivity increases what is the effect on the US domestic demand and supply curves?
yes
Demand curve of a giffen good?
A Giffen good is a good whose consumption increases as its price increases. (For a normal good, as the price increases, consumption decreases.) Thus, the demand curve will be upward instead of downward sloping.A giffen good has an upward sloping demand curve because it is exceptionally inferior. It has a strong negative income elasticity of demand such that when a price changes the income effect outweighs the substitution effect and this leads to perverse demand curve.
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.
How elasticity of demand effect managerial decisions?
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.
What is price elasticity of demand and supply?
Price Elasticity of DemandPrice elasticity of demand (PED) shows the relationship between price and quantity demanded and provides a precise calculation of the effect of a change in price on quantity demanded. PED can be calculated asPED = % change in quantity demanded / % change in priceThe range of PED is 0 to Infinite.Less than one [< 1], which means PED is inelastic.Greater than one [> 1], which is elastic .Zero (0), which is perfectly inelastic.Infinite (∞), which is perfectly elastic.Price Elasticity of SupplyPrice elasticity of supply (PES) measures the responsiveness of quantity supplied to a change in price. It is necessary for a firm to know how quickly, and effectively, it can respond to changing market conditions, especially to price changes. PES can be calculated as below:PES = % change in quantity supplied / % change in priceThere are three extreme cases of PES.Perfectly elastic, where supply is infinite at any one price.Perfectly inelastic, where only one quantity can be supplied.Unit elasticity.
