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cross elasticitycross elasticity of demand measures the degree of responsiveness of the quantity demanded of one good b to changes in the price of
importance of income elasticityif a country is experiencing economic growth the income of the people will increase however for those engaged in
types of income elasticity of demanddepending upon the product demand might increase or decrease in response to a rise in income there are thus
income elasticity of demandthe income elasticity of demand measures the degree of responsiveness of the quantity demanded of a product to changes in
practical importance of the knowledge of price elasticity of demandthe practical importance of the measures of elasticity of demand is to be
factors determining elasticity of demand ease of substitution nature of the commodity ie whether it is a necessity of life luxury or addictive
types of price elasticity of demand a perfectly inelastic demanddemand is said to be perfectly inelastic if changes in price have no
price elasticity of demandis the responsiveness of the quantity demanded to changes in price its co-efficient isped proportionate change
definition of elasticityis defined as the ratio of the relative change of one dependent variable to changes in another independent variable or its a
stable and unstable equilibriuman equilibrium is said to be stable equilibrium when economic forces tend to push the market towards it in other
factors influencing supply curvestate of technology there is a direct relationship between supply and technology improved technology
goals of the firmhow much is produced by a firm depends on its objectives a firm which aims to maximise its sales revenue for example will
prices of the factors of productionas the prices of those factors of production used intensively by x producers rise so do the firms costs this cause
prices of other related goodsi substitutes if x and y are substitutes then if the price x increases the
exceptional supply curvesin have some situations the slope of the supply curve may be reversed i regressive supply in this case the
firm and industry supply schedulesthe plan or table of possible quantities that will be offered for sale at different prices by individual firms for
uses of indifference curve analysisindifference curve analysis is useful when studying welfare economics as followsthey are used to indicate the
income and substitution effects of price changewhen the price of a commodity falls the consumers equilibrium changes the consumer can purchase
the budget line and its economic interpretationthe indifference curve shows us consumer preferences but it does not show us the situation in the
properties of indifference curves an indifference curve is usually convex to the origin indifference curves slope downwards from left to right a set
indifference curve analysisin the 1930s a group of economists including sir john hicks and sir roy allen came to believe that cardinal measurement of
marginal utilitythe extra utility derived from the consumption of one more unit of a good the consumption of all other goods remaining unchangedthe
utilityutility is the amount of satisfaction derived from the consumption of a commodity or service at a particular time utility is not inherent
theory of consumer behaviourthrough the study of theory of consumer behaviour we can be able to explain why consumers buy more at a lower price than
factors influencing demand for a productthese are broadly divided into factors determining household demand and factors affecting market