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.
classification of costs
Arguments against protectionism Most of the arguments for protectionism may be met with counter arguments, but underlying the economic arguments as opposed to the social, mo
Prices of other related goods i) Substitutes: If X and Y are substitutes, then if the price X increases, the quantity demanded of X falls. This will lead to inc
Assume a floating exchange rate system. The Fed pursues an expansionary monetary policy. Draw how this would look on the graphs below. Mark the new equilibriums. Complete the table
Discount Rate (Bank Rate) This is the rate on central bank advances and is also called official discount rate or "minimum lending rate". When commercial banks find themselves
State the Fixed factor of production Input level of a fixed factor can't be varied in the short run. Capital falls under the category of fixed factor. Capital alludes to resour
CONTRACTING AND INSIDER-OUTSIDER MODELS OF UNEMPLOYMENT From the Walrasian assumption of a market-clearing wage on efficiency considerations - it was postulated th
Q. Explain about isocost line? In economics, an isocost line signifies all combinations of inputs that cost the same total amount. Though, similar to the budget constraint in c
Interaction of supply and demand, equilibrium price and quantity In perfectly competitive markets the market price is determined by the interaction of the forces of demand and
Q. Explain about Labour Economies? Labour Economies: As the size of output increases the firm enjoys labour economies because of (a) specialisation, (b) time-saving (c) autom
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd