A case in point is motor vehicles and gasoline. A motor vehicle cannot operate without gasoline. On the other hand, gasoline would not make much sense if motor vehicles were not there. Therefore, the two…
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This is because fewer people will be willing and able to buy motor vehicles and thus have a direct influence on the number of vehicles consuming gasoline.
On the other hand, substitute products are those products that can be used in place of each other. For example, in a meal such a supper, a family may decide to each vegetable with either chicken or beef. In this case therefore, chicken is a substitute for beef and, or it can be said that beef is a substitute for chicken.
Products are said to be substitutes if the increase in price of one product leads to increase in demand for a related product, and vice versa. For example, if the price of beef increases, the demand for chicken will increase as more people will find chicken affordable as compared to beef. On the other hand, if the price of beef decreases, the demand for chicken would reduce as more people will find beef to be
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Greenhouse gas emissions and price elasticity of transport fuel demand in Belgium. In the article, “Greenhouse gas emissions and price elasticities of transport fuel demand in Belgium” the price elasticity of demand for fuel plays a significant role in analyzing the reduction of greenhouse gas emission from Belgium transport sector through intervention by the Belgian government.
Think about whether farmers will use their soybean farms to produce more or less corn. Explain, in economic terms [e.g. supply determinants], why this is so. When the price of corn increase as a result of its being used as an alternative energy source, the supply of corn substitutes like soybeans will decrease.
The supply side constraints may push up the prices. Similarly elasticity of demand for the product acts as a limiting factor to sales. However, in real life situations, the elasticity of demand is governed by diverse factors such as branding, cross selling, value addition, creating new uses for the products, multi-level marketing, direct marketing, discount sales and online marketing.
As a result of this general trend every time the price for diesel or petrol climbs up CD companies immediately try to bring their prices down.
Similarly, when the supply of raw materials important for a CD to be built becomes unavailable or expensive all CD companies are forced to push their prices up.
e in the industry is the price elasticity of demand which is the percentage change in quantity divided by the percentage change in price (Varian, 2003). The price elasticity of demand behaves differently depending on the market structure a firm operates in. This paper analyzes
he price of my product is increased as well as if a particular resource is scarce, will that provoke a scramble for that resource are answered by making use of the concept of elasticity. If we use more technical jargon to define elasticity, it would be that it measures the
The quantity demanded by the veteran smoker at the current price of three dollar a pack is. Obviously the veteran smoker consumes more cigarettes than the new smoker, which is why this is displayed on figure two (fig (2))