elasticity
inelasticity
unitless measure
price change
?
2007-05-23 08:06:05 · 6 answers · asked by Anonymous in Social Science ➔ Economics
Elasticity. If the demand is totally elastic, demand will drop as price goes up. An example might be red wine imported from Australia. If the price is raised, sales will drop. Wine is not needed. There is plenty of competition. Other wines are better in quality.
2007-05-23 08:15:53 · answer #1 · answered by regerugged 7 · 0⤊ 0⤋
It would be the price elasticity of demand. It measures the rate of increase/decrease in demand for a good or service based upon the increase/decrease in the per unit price of that good or service.
There are limits to it's application. For example, if the price of booze decreased, would we consume more? Probably. If the price of a Mercedes decreased, would we consume more? Possibly. The relationship is based on the utility of the good or service and its price relative to substitutes.
2007-05-23 08:15:10 · answer #2 · answered by Anonymous · 0⤊ 0⤋
elasticity of demand you mean? Well it more depends on the propensity to consume that depends on the elasticity in demand that triggers the change in price
2007-05-23 08:11:14 · answer #3 · answered by sameer_com_2000 1 · 0⤊ 0⤋
Normally a rise i price of the product is expected to affect its demand negatively and thus lead to a decline in demand, while a fall in price is expected to lead to a rise in the demand. Quality is normally not likely to be affected: except in the following way: a rise in price may lead some consumers to shift demand from high priced higher quality products to close substitute, cheaper quality products, while a fall in prices may move some consumers to shift to higher priced better quality products. For example, a rise in prices of gasolene may force some autoowners to shift from prime quality to ordinary grade.
2016-05-21 00:28:55 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Elasticity...by definition is the % change in Qd divided by the % change in price
2007-05-23 10:32:40 · answer #5 · answered by Kyle 2 · 0⤊ 0⤋
is price elasticity of demand
2007-05-23 08:55:43 · answer #6 · answered by poulus 1 · 0⤊ 0⤋