Illustrates the significance of elasticity
Illustrates the significance of elasticity?
Expert
Significance of Elasticity is explained here with some important points:
The perception of elasticity of demand is more of practical importance:
1. Production: Producers usually decide their production level on the origin of demand for their product. Therefore elasticity of demand helps to fix the level of output.
2. Price fixation: Each seller under monopoly and imperfect competition has to take in account the elasticity of demand whereas fixing their price. When the demand for the product is inelastic then he can fix a higher price.
3. Distribution: Elasticity assists in the determination of rewards for factors of production. For illustration, when the demand for labour is inelastic, trade union can increase wages.
4. International trade: This perception helps in determining the terms of trade among two countries. Terms of trade, means rate at that domestic commodity is exchanged for foreign commodities.
5. Public finance: It assists the government in formulating tax policies. To impose tax on a commodity, the government must take in consideration the demand elasticity.
6. Nationalization: Elasticity of demand assists the government to decide regarding nationalization of industries.
7. Price discrimination: A manufacture can fix a higher price for the product that have inelastic demand and lower price for product that have elastic demand.
8. Others: The notion elasticity of demand also assisting in taking other vital decision for example: finding out the price of joint product and take over decision.
Competitive equilibria in competitive labor markets need: (w) P = MR = AVC. (x) VMP - P is maximized. (y) VMP = MRP = MFC = w. (z) output is at a break-even level. (q) MPP = P. Can anybody suggest me the proper exp
Define the areas of Scope of Managerial /Business Economics?
Suppose that the auto started began at the intersection of S0 and D0, and then Congress passed a main personal income tax cut. So, how will it affect the auto market?: (w) No change. (x) Demand shifts to D2. (y) Demand shifts to D
For labor Plastibristle’s demand for labor is least wage elastic at: (i) point a. (ii) point b. (iii) point c. (iv) point d. Q : Additional unit in increasing real wage When the real wage raises, in that case an additional unit of: (w) labor supplied will buy fewer goods. (x) leisure is more expensive. (y) output need more labor time. (z) capital becomes more highly utilized. Can
When the real wage raises, in that case an additional unit of: (w) labor supplied will buy fewer goods. (x) leisure is more expensive. (y) output need more labor time. (z) capital becomes more highly utilized. Can
The supply of labor within a perfectly competitive market is: (w) an upward sloping curve. (x) a horizontal line. (y) above the MRC. (z) below the MRC. Can someone explain/help me with best solutio
Define naive method and its techniques briefly.
Describe the term Incremental Revenue in details.
As per most conventional theories of the labor market, the: (w) supply curve of labor is positively sloped since higher wages attract additional workers in the labor market. (x) firms should contend with increasing returns from additional employment.
In what condition the concept of marginal costing basically applied?
18,76,764
1946155 Asked
3,689
Active Tutors
1434959
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!