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 concept of point elasticity is applicable where change in price and the resulting change in quantity are infinite or small. Though, where change in price and consequent hunger in demand is substantial, concept of arc elasticity is the pertinent concept. Arc elasticity is a measure of the average of responsiveness of quantity demanded to a considerable change in the price. Or we can say, the measure of price elasticity of demand between two finite points on a demand curve is called arc activity. For instance, the measure of elasticity between points J and K (Fig. below) is: the measure of arc elasticity. Movement from point J to K along the demand curve D) demonstrates a fall in price from 25$ to 10$ so that AP = 25 - 10 = 15. Consequent increase in demand, AQ = 30 - 50 = - 20. The arc elasticity between point J and K and (moving from J to K) can be attained by substituting these values in the elasticity formula.
EP = (-δQ/δP). (P/Q) = (-20/15)(25/30) = 1.11
Which means that a one percent decrease in price of commodity X results in a 1.11 percent increase in demand for it.
Figure: Measuring Arc Elasticity
1. Suppose in a perfectly competitive industry the market demand and supply forces combine to produce a short-run equilibrium price of Rs 70. Suppose that a firm in this industry h
Ajax has the following short run cost curve when tc=800000-5000Q+100Q2
what is segmentation
REGRESSIVE TAX A tax is said to be regressive when its burden falls more heavily on the poor than on the rich. No civilized government imposes a tax like this.
Q. What do you mean by Ordinal utility? A method of analysing utility or satisfaction derived from consumption of services andgoods, based on a relative ranking of services and
Price rise in future must not be expected - law of demand If the buyers of a commodity expect that its price will increase in future they raise its demand in response to an in
Suppose that in an isoquant mapping, you should consider three isoquants with 1000, 2000 & 3000 units of output. The price of capital is Rs 2 a unit, and the price of labor is Rs 1
Define theVariable factor of production The input level of a variable factor of production can be diverse in the short run. Raw material inputs are believed as variable fact
Controller of Credit The principles of credit control by the central bank were discovered and enunciated after the publication of Bagehot Lombard street in 1873. Even after 187
The use of arc elasticity in economic analysis involves a good deal of chariness since it is capable of being misinterpreted. Arc elasticity coefficients vary between the same two
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