Explain the Expenditure Method of Measurement of Elasticity
Explain the Expenditure Method of Measurement of Elasticity.
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Expenditure or Outlay Method: Expenditure method was developed through Marshall. In this method, the elasticity is measured through estimating the changes in whole expenditure like a result of changes in price and quantity demanded. It has three components.
When the price changes but whole expenditure remains constant then unit elasticity exists.
When the price changes but whole expenditure moves in the opposite directions then demand elastic is (>1).
When the price changes and whole revenues moves in similar direction, demand is inelastic (<1).
It can be expressed by the given diagram.
A cartel is more likely to succeed and survive when: (w) members respond to incentives to cheat. (x) fringe producers are not members. (y) total market demand is less elastic. (z) close substitute goods are simply developed. Q : Area of decision making in Managerial / Illustrates the area of decision making in Managerial / Business Economics?
Illustrates the area of decision making in Managerial / Business Economics?
States the determinants of elasticity?
Explain the target pricing briefly.
Demand for labor of this purely competitive firm in given figure corresponds to: (1) line segment ab. (2) line segment bd. (3) line segment be (4) line segment df. (5) line segment dg. Q : Illustrates the demand schedules Illustrates the demand schedules important for law of demand? Answer: The perception of law of demand may be explained along with the demand schedules are as follow:
Illustrates the demand schedules important for law of demand? Answer: The perception of law of demand may be explained along with the demand schedules are as follow:
Illustrates the terms total cost, average cost and also marginal cost?
Describe the term Incremental Revenue in details.
State the laws of production.
Explain the different types of income elasticity of demand.
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