In Economics, Elastiticy measures the responsiveness of quantity demanded to changes in price. This means if the price changes, how strong or weak is the changes in quantity. However there are many other elasticities that we may not study in Economics. For example, there is also the elasticity to measure how sensitive are the quantity demanded to changes in advertisement. Hence, what elasticity tells us, is how the change in one variable have an impact on another variable. This is important as it helps the organization decide on the best course of action. For example, lets say one business firm decided to decrease the price, hoping to increase the quantity demanded of its product. If the consumers are not elastic, meaning not responsive to the changes in price, there will be no changes or small changes only to the quantity demanded. This means the organization cannot achieve it's goal of increased demand. This means that the organization need to have a change in its strategy, to increase the quantity demanded, either by increasing promotion activities or other ways. Another example, if the government tries to reduce the quantity demanded of a certain good, for example gambling or prostitution, either by taxation, we need to see if the industry is responsive to the tax. If it's resposive, then the government is successful, if not other measures is necessary. Hence, elasticity helps the company and the government to understand if what it's doing produces result or not. This is important, as in Economics, resources are scarce, it's unwise to use resources and the final outcome is not achieved. As a teacher, I introduce the elasticity concept to them, by saying that some students are very responsive to punishements, while others are not responsive to punishments at all. Whether a students is responsive or not, can depend on other factors as well. Hope this helps. (cheong@bgymail.gd.cn)
The purpose and importance of having elasticity in government is to give the government the ability to meet and respond to a variety of challenges, many of which are unforeseen. Some argue that too much elasticity is dangerous, as the government can abuse its power.
Managers and governments need to understand what prices to set their products and services. If they know how elastic their product is then they can maximize the price without turning customers away.
important of elasticity of supply to the government
How can government benefit from the elasticity concepts? Analyse the various economic policies which will benefit from the concept.
Importance of elasticity in economics
Price elasticity has a lot to do with how firms and governments can predict costs and profits. The greater the elasticity, the more uncertain their financial projections will be.
what are the importants of price elasticity of demand to a cellphone dealer
it is what elasticity of demand
How can government benefit from the elasticity concepts? Analyse the various economic policies which will benefit from the concept.
how government use the elasticity concept to genrate revenue
Importance of elasticity in economics
Price elasticity has a lot to do with how firms and governments can predict costs and profits. The greater the elasticity, the more uncertain their financial projections will be.
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The government policies and procedures are often very rigid and there is no scope to change plans as the situation or the time demands.The government is accountable to the people for its action and elasticity will give the government better adjustments and governance.Controlled elasticity is better than free elasticity to the government.
what are the importants of price elasticity of demand to a cellphone dealer
it is what elasticity of demand
It is important because if a company doesn't understand their product's elasticity of demand, they are screwed!
Elasticity helps to find optimal production quantities and thus optimal profits.
It tells us the limits of elasticity.
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