Dinker Presentation on elasticity of demandDinker Vaid
Elasticity Of Demand, Types of Elasticity of Demand, Price Elasticity of Demand, Income Elasticity of Demand, Cross Elasticity of Demand, Zero Income Elasticity of Demand.
Dinker Presentation on elasticity of demandDinker Vaid
Elasticity Of Demand, Types of Elasticity of Demand, Price Elasticity of Demand, Income Elasticity of Demand, Cross Elasticity of Demand, Zero Income Elasticity of Demand.
Normal laws of demand suggest that as prices increase demand decreases whilst firms attempt to supply more (with the opposite happening as prices decrease). The concept of elasticities asks the question ‘by how much does demand and supply change?’ Recent examination reports have made it clear that “price elasticity is an important topic and students should be prepared to apply it to the examination context as well as quote the formulas.” There is a lot to learn in this section – start with a good understanding of what elasticity it and how it is measured. Then consider why it matters for businesses to have a working knowledge / estimate of the coefficient of price elasticity of demand.
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Acetabularia acetabulum is a single-celled green alga that in its vegetative state is morphologically differentiated into a basal rhizoid and an axially elongated stalk, which bears whorls of branching hairs. The single diploid nucleus resides in the rhizoid.
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Francesca Gottschalk from the OECD’s Centre for Educational Research and Innovation presents at the Ask an Expert Webinar: How can education support child empowerment?
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This will be used as part of your Personal Professional Portfolio once graded.
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Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
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The Roman Empire, a vast and enduring power, stands as one of history's most remarkable civilizations, leaving an indelible imprint on the world. It emerged from the Roman Republic, transitioning into an imperial powerhouse under the leadership of Augustus Caesar in 27 BCE. This transformation marked the beginning of an era defined by unprecedented territorial expansion, architectural marvels, and profound cultural influence.
The empire's roots lie in the city of Rome, founded, according to legend, by Romulus in 753 BCE. Over centuries, Rome evolved from a small settlement to a formidable republic, characterized by a complex political system with elected officials and checks on power. However, internal strife, class conflicts, and military ambitions paved the way for the end of the Republic. Julius Caesar’s dictatorship and subsequent assassination in 44 BCE created a power vacuum, leading to a civil war. Octavian, later Augustus, emerged victorious, heralding the Roman Empire’s birth.
Under Augustus, the empire experienced the Pax Romana, a 200-year period of relative peace and stability. Augustus reformed the military, established efficient administrative systems, and initiated grand construction projects. The empire's borders expanded, encompassing territories from Britain to Egypt and from Spain to the Euphrates. Roman legions, renowned for their discipline and engineering prowess, secured and maintained these vast territories, building roads, fortifications, and cities that facilitated control and integration.
The Roman Empire’s society was hierarchical, with a rigid class system. At the top were the patricians, wealthy elites who held significant political power. Below them were the plebeians, free citizens with limited political influence, and the vast numbers of slaves who formed the backbone of the economy. The family unit was central, governed by the paterfamilias, the male head who held absolute authority.
Culturally, the Romans were eclectic, absorbing and adapting elements from the civilizations they encountered, particularly the Greeks. Roman art, literature, and philosophy reflected this synthesis, creating a rich cultural tapestry. Latin, the Roman language, became the lingua franca of the Western world, influencing numerous modern languages.
Roman architecture and engineering achievements were monumental. They perfected the arch, vault, and dome, constructing enduring structures like the Colosseum, Pantheon, and aqueducts. These engineering marvels not only showcased Roman ingenuity but also served practical purposes, from public entertainment to water supply.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
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An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
2. Chapter Outline 5 Elasticity Price Elasticity of Demand Slope and Elasticity Types of Elasticity Calculating Elasticities Calculating Percentage Changes Elasticity Is a Ratio of Percentages The Midpoint Formula Elasticity Changes along a Straight-Line Demand Curve Elasticity and Total Revenue The Determinants of Demand Elasticity Availability of Substitutes The Importance of Being Unimportant The Time Dimension Other Important Elasticities Income Elasticity of Demand Cross-Price Elasticity of Demand Elasticity of Supply Looking Ahead Appendix: Point Elasticity
3. ELASTICITY elasticity A general concept used to quantify the response in one variable when another variable changes.
4. PRICE ELASTICITY OF DEMAND SLOPE AND ELASTICITY FIGURE 5.1 Slope Is Not a Useful Measure of Responsiveness
5. PRICE ELASTICITY OF DEMAND price elasticity of demand The ratio of the percentage of change in quantity demanded to the percentage of change in price; measures the responsiveness of demand to changes in price.
6. PRICE ELASTICITY OF DEMAND TYPES OF ELASTICITY perfectly inelastic demand Demand in which quantity demanded does not respond at all to a change in price. Elastic -3.0 -30% +10% Bananas Unitarily elastic -1.0 -10% +10% Beef Inelastic -0.1 -1% +10% Basic telephone service Perfectly inelastic 0.0 ELASTICITY (% Q D ÷ % P ) 0% % CHANGE IN QUANTITY DEMANDED (% Q D ) +10% Insulin % CHANGE INPRICE (% P ) PRODUCT TABLE 5.1 Hypothetical Demand Elasticities for Four Products
7. PRICE ELASTICITY OF DEMAND FIGURE 5.2 Perfectly Elastic and Perfectly Inelastic Demand Curves inelastic demand Demand that responds somewhat, but not a great deal, to changes in price. Inelastic demand always has a numerical value between zero and -1.
8. PRICE ELASTICITY OF DEMAND unitary elasticity A demand relationship in which the percentage change in quantity of a product demanded is the same as the percentage change in price in absolute value (a demand elasticity of -1). A warning: You must be very careful about signs. Because it is generally understood that demand elasticities are negative (demand curves have a negative slope), they are often reported and discussed without the negative sign. For example, a technical paper might report that the demand for housing “appears to be inelastic with respect to price, or less than 1 (0.6).” What the writer means is that the estimated elasticity is -.6, which is between zero and -1. Its absolute value is less than 1.
9. PRICE ELASTICITY OF DEMAND elastic demand A demand relationship in which the percentage change in quantity demanded is larger in absolute value than the percentage change in price (a demand elasticity with an absolute value greater than 1). perfectly elastic demand Demand in which quantity drops to zero at the slightest increase in price.
10. PRICE ELASTICITY OF DEMAND A good way to remember the difference between the two “perfect” elasticities is:
11. CALCULATING ELASTICITIES CALCULATING PERCENTAGE CHANGES To calculate percentage change in quantity demanded using the initial value as the base, the following formula is used:
12. CALCULATING ELASTICITIES We can calculate the percentage change in price in a similar way. Once again, let us use the initial value of P —that is, P 1 —as the base for calculating the percentage. By using P 1 as the base, the formula for calculating the percentage of change in P is simply:
13. CALCULATING ELASTICITIES Once all the changes in quantity demanded and price have been converted into percentages, calculating elasticity is a matter of simple division. Recall the formal definition of elasticity: ELASTICITY IS A RATIO OF PERCENTAGES
14. CALCULATING ELASTICITIES THE MIDPOINT FORMULA midpoint formula A more precise way of calculating percentages using the value halfway between P 1 and P 2 for the base in calculating the percentage change in price, and the value halfway between Q 1 and Q 2 as the base for calculating the percentage change in quantity demanded.
15. CALCULATING ELASTICITIES Using the point halfway between P 1 and P 2 as the base for calculating the percentage change in price, we get
16. CALCULATING ELASTICITIES By substituting the numbers from Figure 5.1(a): Next, Calculate Percentage Change in Price (% P): PRICE ELASTICITY COMPARES THE PERCENTAGE CHANGE IN QUANTITY DEMANDED AND THE PERCENTAGE CHANGE IN PRICE: DEMAND IS ELASTIC By substituting the numbers from Figure 5.1(a): First, Calculate Percentage Change in Quantity Demanded (% Q D ): TABLE 5.2 Calculating Price Elasticity with the Midpoint Formula
17. CALCULATING ELASTICITIES ELASTICITY CHANGES ALONG A STRAIGHT-LINE DEMAND CURVE FIGURE 5.3 Demand Curve for Lunch at the Office Dining Room 0 2 4 6 8 10 12 14 16 18 20 22 $11 10 9 8 7 6 5 4 3 2 1 0 QUANTITY DEMANDED (LUNCHES PER MONTH) PRICE (PER LUNCH) TABLE 5.3 Demand Schedule for Office Dining Room Lunches
18. CALCULATING ELASTICITIES ELASTICITY AND TOTAL REVENUE TR = P x Q total revenue = price x quantity In any market, P x Q is total revenue ( TR ) received by producers: When price ( P ) declines, quantity demanded ( Q D ) increases. The two factors, P and Q D , move in opposite directions: Effects of price changes on quantity demanded:
19. CALCULATING ELASTICITIES Because total revenue is the product of P and Q , whether TR rises or falls in response to a price increase depends on which is bigger, the percentage increase in price or the percentage decrease in quantity demanded. If the percentage decline in quantity demanded following a price increase is larger than the percentage increase in price, total revenue will fall. Effects of price increase on a product with inelastic demand: Effects of price increase on a product with inelastic demand:
20. CALCULATING ELASTICITIES The opposite is true for a price cut. When demand is elastic, a cut in price increases total revenues: When demand is inelastic, a cut in price reduces total revenues: effect of price cut on a product with elastic demand: effect of price cut on a product with inelastic demand:
21. THE DETERMINANTS OF DEMAND ELASTICITY Perhaps the most obvious factor affecting demand elasticity is the availability of substitutes. AVAILABILITY OF SUBSTITUTES When an item represents a relatively small part of our total budget, we tend to pay little attention to its price. THE IMPORTANCE OF BEING UNIMPORTANT THE TIME DIMENSION The elasticity of demand in the short run may be very different from the elasticity of demand in the long run. In the longer run, demand is likely to become more elastic, or responsive, simply because households make adjustments over time and producers develop substitute goods.
22. OTHER IMPORTANT ELASTICITIES INCOME ELASTICITY OF DEMAND income elasticity of demand Measures the responsiveness of demand to changes in income.
23. OTHER IMPORTANT ELASTICITIES CROSS-PRICE ELASTICITY OF DEMAND cross-price elasticity of demand A measure of the response of the quantity of one good demanded to a change in the price of another good.
24. OTHER IMPORTANT ELASTICITIES ELASTICITY OF SUPPLY elasticity of supply A measure of the response of quantity of a good supplied to a change in price of that good. Likely to be positive in output markets.
25. OTHER IMPORTANT ELASTICITIES elasticity of labor supply A measure of the response of labor supplied to a change in the price of labor.