Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The relationship between, total expenditure and price elasticity of demand has summed up in the below table:
Table: Elasticity and Consumption Expenditure
Elasticity
(ece)
Price change M
Marginal Expenditure
Total Consumer
Expenditure
ece< 1
Rise
ME < 1
Decreases
Fall
ME > 1
Increases
ece = 1
ME = 1
Constant
ece > 1 R
As illustrated in Table above, when ece> 1, for example demand is elastic, an increase in price causes more than proportionate decrease in quantity demanded. Therefore, total expenditure decreases. And, if price decreases quantity demanded increases more than proportionately. Consequently total expenditure increases.
When ece = 1, a rise (or fall) in price causes a proportionate fall (or rise) in quantity demanded leaving total expenditure unchanged.
When ece< 1, it implies when demand is inelastic, a rise in price causes a rise in the total expenditure since demand decreases less than proportionately and a fall in price decreases it as quantity demanded increases less than proportionately.
all theory
PROBLEMS OF USING PER CAPITA INCOME TO COMPARE STANDARD OF LIVING OVER TIME 1) The composition of output may change. e.g. more defence-related goods may be produced and
Types of Price Elasticity of demand a) Perfectly inelastic demand Demand is said to be perfectly inelastic if changes in price have no the quantity demanded so
Imagine an amusement park with a sole attraction: a roller coaster. For simplicity, the cost of providing a ride is zero. There is a single consumer with demand for rides on the ro
what is segmentation
Q. Relation between average cost and marginal cost? Relationship between MC and AC are the following: If MC is below AC then AC should be falling. This is because, if MC
Marginal Revenue (MR) This is the increase in Total Revenue resulting from the sale of an extra unit of output. Thus, if TR n-1 is Total Revenue from the sale of (n-1) units
Q. Illustrate Internal Economies of Scale? Internal economies of scale are the benefits of large scale production. They are enjoyed by the firm when it increases its scale of p
Q. Explain about Regression analysis? Regression analysis is the statistical technique which identifies the relationship between two or more quantitative variables: a dependent
How economics contributes to managerial functions However economics is variously defined, it's basically the study of logic andtechniques and tools, to make optimum use of ava
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd