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 relationship between, total expenditure and price elasticity of demand has summed up in the below table:
Table: Elasticity and Consumption Expenditure
Elasticity
(ece)
Price change M
Marginal Expenditure
Total Consumer
Expenditure
ece< 1
Rise
ME < 1
Decreases
Fall
ME > 1
Increases
ece = 1
ME = 1
Constant
ece > 1 R
As illustrated in Table above, when ece> 1, for example demand is elastic, an increase in price causes more than proportionate decrease in quantity demanded. Therefore, total expenditure decreases. And, if price decreases quantity demanded increases more than proportionately. Consequently total expenditure increases.
When ece = 1, a rise (or fall) in price causes a proportionate fall (or rise) in quantity demanded leaving total expenditure unchanged.
When ece< 1, it implies when demand is inelastic, a rise in price causes a rise in the total expenditure since demand decreases less than proportionately and a fall in price decreases it as quantity demanded increases less than proportionately.
Interest and the Keynesian Liquidity Preference Theory Interest is a factor income in that it is considered to be payment to or return on capital in the sense that it is payme
INDIRECT TAXES These are imposed on an individual mostly producers or traders but they can be passed on to be borne by others usually the final consumers. They can also be de
A profit-maximizing firm faces the following options for hiring workers: a) Assume the firm has limited space so that it can only hire one worker. Which type of employee sh
define derivatives
Antitrust authorities at the Federal Trade Commission are reviewing your company's recent merger with a rival firm. The FTC is concerned that the merger of two rival firms in the s
Opportunity cost is cost of a different that must be forgone in order to pursue a definite action. Put another way, the advantages you could have received by taking an alternative
Ingrid and Jeff would like to use Saturday night together but have dissimilar tastes in entertainment. Jeff would like to go to the opera but Ingrid would prefer to see soccer. As
Estimating economic relationships Managerial economics estimates economic relationships between various business factors likeelasticity of demand, income, profit analysis, cos
Q. Example on Changes in fixed costs and profit maximisation? What if arena owner in the illustration above triples the fee for the subsequent concert but all other factors are
Factors influencing the supply of a commodity a) Own Price of the commodity There is a direct relationship between quantity supplied and the price so that the hig
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd