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Usually, elasticity of a demand curve throughout its length isn't the same (Fig. below). It varies between 0 and ∞, or in other words,
0 ≤ ep ≥ ∞
In some cases, though, the elasticity remains the same throughout the length of demand curve. Such demand curves can be placed in the subsequent categories: (i) perfectly inelastic (e = 0); (ii) unitary elastic (e = 1); and (iii) perfectly elastic (e = ∞). These three types of demand curves are demonstrated in Fig. below (a), (b) and (c), respectively.
Fig: Constant Elasticity Demand Curve
Planned Economy Is a system where all major economic decisions are made by a government ministry or planning organisation. Here all questions about the allocation of resources
How does economic theory contribute to managerial decisions?
Advantages of Product Differentiation We can distinguish between those advantages for the firm itself and those for the consumer: a. For the firm. i.
Custodian of Member Banks Cash Reserves As bankers bank the central bank performs several function. It keeps the cash reserves of commercial banks in the economy and thus acts
Real Rigidities in the Goods Market The most important factor associated with real rigidity in the goods market is the existence of imperfect competition. Imperfect comp
Q10000-50p
assumptions and limitations
Oligopoly can be characterized as follows: Small Number of Sellers: There are more than one sellers of a product though; the number isn't so huge in order to produce perfect
define equi marginal principle
I have a research paper that is due, my schedule is so full that I need assistance due to overload are you interested in the research paper? course - managerial economics TEXT: Man
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