the more elastic the demand is, the more the price will affect the demand. For instance, a price increase of an elastic product would decrease the demand for it. Inelastic products’ demand, on the other hand, is not affected by price. If the price were increased on these products, the...
What does it mean if a good has inelastic demand? Provide an example. Factor demand is a derived demand. Where is this demand derived from? Illustrate with an example. Describe demand function. What is the term for when the supply of something is less than the demand?
In the case of a price ceiling, the demand for a good or service is more than the supply, and thus, results in a shortage. If the demand for the product is inelastic, the price ceiling will lower the seller’s profit.This is because a lower price won’t much push the demand up. ...
perfectly inelastic c. imperfect d. market elastic. How does the market structure of monopolistic compared to perfect competition? Describe how one can maximize profit in a perfect competition market? The demand curve of a perfectly competitive firm is ___. The zero-profit point for...
% change in price therefore, the elasticity of demand is the percentage change in the quantity demanded as a result of a percentage change in the price of a product. because the demand for certain products is more responsive to price changes, demand can be elastic or inelastic. when the ...
A product is said to be elastic if raising its price reduces the demand considerably (example: coffee, people will switch to tea) and the product/service is inelastic if its demand is not affected even after raising the price. (Example: petrol) ...
If the demand is inelastic, a significant part of indirect tax can be imposed on the consumers by increasing the price. On the contrary, if the demand tends to be elastic, then the burden of the tax will be more on the manufacturer. ...
Jenny concludes that the supply of this crop is inelastic since the price elasticity of supply is less than 1. This means that companies are either unable or unwilling to produce more crops as the price increases. This could be due to limitations in technology, storage systems, distribution sys...
Examples of inelastic goods or services can include gasoline and prescription medicines, as noted above. The level of consumption across the economy remains steady with price changes. Elastic products are those whose demand is significantly affected by price. This group of products includes luxury good...
Quantity demanded is the amount of goods or services that consumers demand over a measurement of time. It depends on a product’s price. The relationship between the two is often referred to as the demand curve. A good or service can be inelastic if it’s immune to demand because consumers...