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How does the incidence of a tax use the price elasticity of supply and demand?
If the demand is perfectly elastic in prices (that is, demand falls to zero if the price for consumers is raised even the slightest bit), then the entire tax incidence falls on the producer since the producer would rather face the entire tax burden than lose all his consumers. And if the demand is perfectly inelastic (doesn't change with change in commodity price) then the entire burden falls on the consumers. So higher the price elasticity of demand, higher would be the share of taxes borne by the producer. And higher the price elasticity of supply, lower the share borne by the producer, by similar logic.
What does the word elasticity?
The term inelastic refers to the economic principles of elasticity of supply or demand. Elasticity of demand refers to the rate at which a change in price changes the rate at which consumers demand a product. Elasticity of supply refers to the rate at which a change in price changes the rate at which suppliers are willing to supply a good or service. In most cases elasticity can be calculated by dividing the percent change in supply or demand by the percent change in price. In more advanced cases the calculation of elasticity may require partial derivatives. If elasticity is less than 1, then the price change is inelastic. This means the price change was relatively greater than the change in supply or demand. If demand elasticity is less than 1, a business will generally increase the price of its good or service because it knows it can make more money by charging a hire price even after accounting for the customers it would lose because of the price increase. if elasticity is greater than 1, then the price change is elastic. This means the change in demand or supply is relatively greater than the change in price. if elasticity equals 1, then the price change is unit elastic. This means the change in demand or supply is relatively equal to the change in price. Profit maximizing firms generally charge a price the has a unit elastic demand because charging anymore would mean not profit maximizing because they are losing too many customers and charging any less would mean not maximizing profit due to the price being too low. If elasticity equals 0, then the price change is perfectly inelastic. This means that no matter the price, the demand will always be the same (in the case of demand elasticity) or the supply will always be the same (in the case of supply elasticity). Goods that fall into this category are rarer than the first three categories. A good with a perfectly inelastic demand has to be something that the consumers in the market could not live without (literally or figuratively). Two examples are life saving medical treatments and illegal drugs. If elasticity equals infinity (change in price is 0), then the good is perfectly elastic. In this case, even the slightest change in price sends the demand or supply for a good or service plummeting to 0. An (albeit not perfect) example is bottled water. If a bottled water company changes its price from $1 to $1.05 and another company has the same product still readily available for $1, then demand for the $1.05 water will plummet.
What they mean by Downward Demand Spiral?
Means the company has to increase sales price to cover increased per unit production costs due to a former decrease in capacity utilization and thus loses another portion of sales volume due to good elasticity and has to further increase prices and then lose market.
Do stores lose money when people use coupons?
No. In fact the stores make MORE money when people use cupons because the store gets a refund, PLUS a shipping return fee (which they get paid for shipping it).
How does currency get its power?
Currency gets its Power from the People who accept it. If you lose faith in the ability of the Government to stand behind a currency its value decreases, or can become ZERO. If you want to buy something from me and I refuse to accept your Currency, and demand Gold, what is the Currency's value...well Zero for this transaction.
How does heat affect the elasticity of a rubber band?
Heat can cause a rubber band to lose its elasticity by breaking down the molecular structure of the rubber, making it less flexible and more prone to stretching or breaking.
How does heat affect the elasticity and durability of rubber bands?
Heat can cause rubber bands to lose their elasticity and durability. When exposed to high temperatures, the rubber molecules break down and become less flexible, leading to a decrease in elasticity and an increase in brittleness. This can cause the rubber band to break more easily and lose its ability to stretch and return to its original shape.
How does the stretch length of a rubber band affect its elasticity and performance?
The stretch length of a rubber band affects its elasticity and performance by determining how much force it can withstand before breaking. When a rubber band is stretched beyond its limit, it may lose its elasticity and ability to return to its original shape, leading to decreased performance. It is important to not overstretch a rubber band to maintain its elasticity and performance.
Why rubber bands are affected by temperature?
Rubber bands are affected by temperature because they are made of polymers that become more rigid and less elastic at colder temperatures, and softer and more stretchable at higher temperatures. These changes in temperature can cause rubber bands to become brittle and break more easily in cold conditions, and stretch out and lose their elasticity in hot conditions.
What causes rubber bands to lose elasticity rapidly in Las Vegas desert?
Rubber bands lose elasticity rapidly in the Las Vegas desert due to exposure to high temperatures, dry climate, and UV radiation. These environmental factors can break down the rubber material, causing it to become brittle and lose its flexibility. Additionally, prolonged exposure to sunlight can accelerate the degradation process of rubber bands in the desert environment.
What are things that lose elasticity?
We would need to know what conditions you're referring to to respond to this question.
What destroys rubber and causes it to deteriorate?
Rubber deteriorates due to exposure to oxygen, heat, light, and certain chemicals. This process, known as oxidation, causes the rubber to become brittle, crack, and lose its elasticity over time.
Why rubber band become powdery?
Rubber bands can become powdery due to a process called oxidation, where the rubber degrades over time when exposed to light, air, or heat. This causes the rubber to lose its elasticity and become brittle, eventually turning into a powdery substance.
What does heat do to rubber?
When left out in the sun rubber will loose some of its elasticity or crack, the ink will lose some color, and paper will be bleached or become whiter. This occurs because of the action of the ultraviolet light of the sun.
How does exposing a rubber band to sunlight or chemicals or heat change its strength?
Exposing a rubber band to sunlight can lead to degradation of the material, causing it to become brittle and lose strength over time. Chemical exposure can also weaken the rubber band by breaking down its molecular structure. Heat can accelerate this process, causing the rubber band to lose elasticity and strength more quickly.
What causes the arteries to lose there elasticity?
When the artery walls lose their elasticity, this is called arteriosclerosis. When this happens, the body has a tougher time circulating blood.
How does heat effect rubber?
Heat can cause rubber to become softer and more pliable, which may lead to deformation or melting at high temperatures. Prolonged exposure to heat can accelerate the breakdown of rubber material, causing it to degrade and lose its elasticity, strength, and durability.
