Nobody downloaded yet

Elasticity - Essay Example

Comments (0) Cite this document
Summary
this even helps in measuring the different responses of the quantity demanded for a particular product or services is noted to be changing based on the needs and…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER91.6% of users find it useful
Elasticity
Read TextPreview

Extract of sample "Elasticity"

Download file to see previous pages The essay explains the three elements of elasticity and their respective implication on the organisations. By elaborating on the different needs of elasticity the essays proposes to identify the implications of the concepts on the organisations. Furthermore, with the use of examples, the paper intends to illustrate the different concepts that are related with the practical implications of the same on the organisational backdrop.
The ‘price elasticity of demand’ is defined as “is the ratio of the percentage change in the quantity demanded of a commodity to a percentage change in price” (Jain, & Ohri, 2010). Price is one of the most important factors that determine the amount of goods that is likely to be demanded by the consumers. The change in price of a product has a direct impact on the overall demand of a consumer. This measure of elasticity helps in identifying the sensitivity of consumers based on their individual needs of demanding a particular product as per the change in price. The price elastic goods are often noted to be having a huge shift in the quantity demanded based on a slight shift in the price of the product. It is noted that determination of price of a commodity in the economy is quite significant (Hirschey, 2008). Price elasticity is the most common type of elasticity of demand and is measured in terms of the reaction that a product has towards change in price. The following equation helps in determining the measure of price elasticity of demand.
The above equation illustrate that the price elasticity of demand helps in measuring the sensitivity of a product towards percentage change in quantity demanded based on price. The same could be justified using graphical representation.
The graph depicts that at A the price of the commodity is denoted by P whereas the demand of the commodity is denoted as Q. Notably, with the fall in the price of commodity from P to P1 the quantity of the commodity ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Elasticity Essay Example | Topics and Well Written Essays - 2500 words - 1”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1682718-elasticity
(Elasticity Essay Example | Topics and Well Written Essays - 2500 Words - 1)
https://studentshare.org/macro-microeconomics/1682718-elasticity.
“Elasticity Essay Example | Topics and Well Written Essays - 2500 Words - 1”, n.d. https://studentshare.org/macro-microeconomics/1682718-elasticity.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Elasticity

Elasticity

...for the production of corn oil is captured by a leftward shift in the supply curve of corn oil. In turn, the leftward shift in the supply curve or quantity supplied for corn oil at any given price will lead to a higher equilibrium price for corn oil. How does the price elasticity of demand for corn oil influence the quantity-demanded of corn oil and the Total Revenue earned by sellers of corn oil? Explain, using economic terms, why this is so. As pointed out by Varian (2005, pp. 270), the price elasticity of demand is the “percent change in quantity demanded divided by the percent change in price.” As implied in Varian (2005, pp. 270-275), when the price elasticity of demand for corn oil...
2 Pages(500 words)Essay

Price Elasticity of Demand

...reflects a very elastic product where the quantities demanded are largely affected by the price change. The figures below reflect the way the various curves will look like in different scenarios. Mylan Laboratories Mylan Laboratories is a pharmaceutical company in Pittsburgh. The company announced an increase in prices of their drugs. One client claimed that the company increased the price of a drug referred to as lorazepam from an initial $11 to $85 (Techdirt 2011, p. 2). The man who had been a worker at an oil rig was involved in an accident and is now dependant on those drugs to relieve the pain. He is on a government scheme that entitles him to $1,000 every month. He usually uses around 100 pills every month and he...
4 Pages(1000 words)Essay

Elasticity

...?ELASTI OF DEMAND The sales of a product depend upon the demand for the product. There are several factors which influence the demand for the products. Price being the primary determinant, other factors includes disposable income level of the buyers for the particular product, prices of the substitute products and future trends in prices and changes in tastes and preferences of the consumers. 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,...
8 Pages(2000 words)Research Paper

Distinguish between price elasticity of demand, cross elasticity of demand, income elasticity of demand and price elasticity of

...?introduction Price fluctuations can influence not only the producers but the consumers as well. Changes in prices cause changes in the demand and supply and therefore everyone is influenced because of changes in the price level (Hoover, 2011). Although prices can be controlled by the government but it is a complex process and there are number of factors that need to be considered to understand the changes in the price level. This report is divided into two sections; the first section of the report discusses important terminologies such as Price elasticity of demand, Cross elasticity of demand, Income elasticity of demand and Price elasticity of supply. The other section...
5 Pages(1250 words)Essay

Price Elasticity

...the more expensive parts if they have to. (Lamb, 2004) Given how dependant the CD industry is on both the supply of building materials as well as the demand of the consumers we find that the price elasticity of both demand and supply is rather high on the CD industry. All private markets generate what are called 'externalities' or 'spillovers'. Such externalities include any sort of charge or benefit that the price of the merchandise or services sold by the market does not include. When we talk about a positive externality we essentially refer to all the extra or excess benefits yielded by certain activities of the producer that he/she was ultimately unable to put to full use. Now, like in every other industry as big...
2 Pages(500 words)Essay

Elasticity

...Introduction In economics, elasti signifies the measurement of change that is introduced in one variable when one or more of the other variables are changed. For instance, the questions as to how much would I sell more if the price of my product is lowered, how much less would I sell if the 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 percentage change in one variable to the percentage change in another variable. The function of responsiveness of a particular variable to the change...
5 Pages(1250 words)Essay

Price Elasticity

...Price Elasti Price elasti is a term that defines the level of responsiveness of consumers to changes in price, however negligible this change is. Price elasticity measures how responsive a variable is to price changes. A product is considered elastic if a small price change has a substantial impact on the demanded quantity. On the other hand, a product is said to be inelastic if a huge change in price has little impact on the quantity in demand (Moschandreas, 2000). Several factors affect price elasticity. The factors with the largest effect on the elasticity of a commodity include the level of income available to spend on the good. The greater the percentage of income the commodity represents, the greater the elasticity because... it will...
1 Pages(250 words)Research Paper

Elasticity

... Unit Macro and Micro Economics (Elasti Question One As per figure one on the scanned graphs, the new smoker demand curve is a straight line with a slope of zero (flat slope). The new smoker currently demands at three dollars a pack and is likely to increase the quantity of pack he or she smokes to  as time goes by. On the other hand the veteran smoker has a steep demand curve. 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)) on the scanned graphs. An equilibrium point of quantity is obtained when the two demand curves are drawn on a single graph... Unit Macro...
2 Pages(500 words)Essay

Elasticity paper

...Elasti Paper Complementary products are those that are in most cases used together. A case in point is motor vehiclesand 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 products are complements of each other. Products are said to be complementary if when the price of one decrease (or increases) the demand of a related product increases (or decreases). For example, motor vehicles are complementary to gasoline because when the prices of motor vehicles increase, the demand of gasoline reduces. This is because fewer people will be willing and able to buy motor vehicles and thus have a direct influence on the number... Paper...
1 Pages(250 words)Essay

Price Elasticity

...Macro and Microeconomics: Price Elasti Discuss cross price elasti as it pertains to substitute goods and complementary goods Cross-price elasticity as it pertains to the demand generally measures good demand responsiveness to price change of another good. In most cases, cross-price elasticity of demand tends to measure the rate of quantity response that is demanded on a particular good because of price change of a different good (Tobin, 1987). In this case, substitute goods generally refer to a pair of goods in which the consumers consider alternative. On the other hand, complementary goods are those that are used together; one item is usable only when the other item is available. In this case, if goods A...
1 Pages(250 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Elasticity for FREE!

Contact Us