Explain why both the pes and ped tend to be inelastic, Microeconomics

Assignment Help:

Explain why both the PES and PED tend to be inelastic in the short run for primary goods.

PED deals with (primarily) the ability and propensity of consumers to switch to other goods, which in turn deal with the availability of substitutes, the amount spent on the good and how income sensitive the good is. Taken together, in the SR, consumers are rather unwilling to switch to other goods when it comes to primary commodities, as are firms, which use such goods as factor inputs. PES deals with the availability and ease of switching to supplier substitutes, which in the SR is rather complex for commodity goods - because of seasonality of agricultural goods and the heavy investment often seen in mining for minerals.

 


Related Discussions:- Explain why both the pes and ped tend to be inelastic

Project, I have to make a research paper project on Investigating the buyin...

I have to make a research paper project on Investigating the buying behavior of individuals in the white goods sector and seeing if there exists any negative relationship between d

What is market clearing level and public good, What is market clearing leve...

What is market clearing level and public good? Market clearing level is the price level current in the market at which consumer is willing to purchase a particular commodity f

Theories of the firm, how a firm will choose its optimal inputs, isocosts a...

how a firm will choose its optimal inputs, isocosts and isoquants explanation

Functions of the adb, Functions of the ADB: ADB finances principally s...

Functions of the ADB: ADB finances principally specific projects in the region. It may make loans to or invest in the projects concerned. It may also guarantee loans granted t

MBA, The market demand for brand X has been estimated as Qx=1500-3Px-0.05I-...

The market demand for brand X has been estimated as Qx=1500-3Px-0.05I-2.5Py+7.5Pz Where Px is the price of brand X, I is per-capita income, Py IS the price of brand Y, and Pz is th

Explain about capital flight, Q. Explain about Capital Flight? Capital ...

Q. Explain about Capital Flight? Capital Flight: A destructive process in that investors (both domestic residents and foreigners) withdraw their financial capital from a countr

Optimization, Andrew has preference given by: u(x,y) = min{2x, 3y} The pri...

Andrew has preference given by: u(x,y) = min{2x, 3y} The price for good x and good y are identical and equal to 4. At his optimal consumption bundle he achieves a utility of 90. W

Microeconomics, Ways in which the markets fail and discuss why government i...

Ways in which the markets fail and discuss why government intervention is justified and whether government intervention works or not.

What is black economy, Defining black economy, If you pay your cleaner or ...

Defining black economy, If you pay your cleaner or builder in cash or for some reason neglect to tell the taxman which you were paid for a service rendered, you participate in the

Curvature of the iso-quant, Curvature of the Iso-quant: An iso-qunat i...

Curvature of the Iso-quant: An iso-qunat is convex to the origin. This is so because as more and more units labour are employed, the producer would prefer to give up less and

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd