A set of graphs shows the relationship between demand and total revenue (TR) for a linear demand curve.
As price decreases in the elastic range, TR increases, but in the inelastic range, TR decreases.
Microeconomics Final
35 questions
some of the questions from previous tests
chapters 9, 11,
9:
11:
What differentiates oligopolies, from monopolies, from
perfect competition?
Know about cartels.
and which as the ending value. For example, if quantity demanded increases from 10
units to 15 units, the percentage change is 50%, i.e., (15 10) 10 (converted to a
percentage). But if quantity demand
When the price elasticity of demand for a good is relatively elastic ( - < Ed < -1), the
percentage change in quantity demanded is greater than that in price. Hence, when the
price is raised, the tot
ther with the concept of an economic "elasticity" coefficient, Alfred Marshall is credited with
defining PED ("elasticity of demand") in his book Principles of Economics, published in 1890.
[20]
He de
The above formula usually yields a negative value, due to the inverse nature of the
relationship between price and quantity demanded, as described by the "law of demand".
[3]
For example, if the price
rcentage change in price. (One change will be positive, the other negative.) [33] The
percentage change in quantity is related to the percentage change in price by elasticity:
hence the percentage cha
Price elasticity of demand (PED or Ed) is a measure used in economics to show the
responsiveness, or elasticity, of the quantity demanded of a good or service to a change in
its price. More precisely,
ompute the percentage change in P and Q relative to the average of the two prices and
the average of the two quantities, rather than just the change relative to one point or the
other. Loosely speakin
In other words, it is equal to the absolute value of the first derivative of quantity with respect
to price (dQd/dP) multiplied by the point's price (P) divided by its quantity (Qd).[15]
In terms of p
elasticity of demand if a significant number of substitutes are available, whereas food
in general would have an extremely low elasticity of demand because no substitutes
exist.[29]
Percentage of inc
e may say, is great. In the latter case. the elasticity of his demand is
small."[22] Mathematically, the Marshallian PED was based on a point-price definition, using
differential calculus to calculate
Ds, in combination with price elasticity of supply (PES), can be used to assess where the
incidence (or "burden") of a per-unit tax is falling or to predict where it will fall if the tax is
imposed. F
Brand loyalty: an attachment to a certain brandeither out of tradition or because
of proprietary barrierscan override sensitivity to price changes, resulting in more
inelastic demand.[29][31]
Who pay
Micro Quiz #1
Factors of Production:
1. labor
2. capital
3. natural resources
Entrepreneur- someone who brings all the factors of
production together
opportunity cost- the cost of the foregone opportu