ECON 1 Lecture Notes - Lecture 27: Normal Good, Marginal Cost, Economic Equilibrium

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magentamuskrat366

3 Dec 2020

School

Irvine Valley College

Department

Economics

Course

ECON 1

Professor

Collinson

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Document Summary

Disequilibrium: temporary mismatch between quantity supplied and quantity demanded as the market seeks equilibrium. Price floors: a minimum selling price that must be above equilibrium price to have an impact. Price ceilings: a maximum selling price which must be set below equilibrium price to have an impact. Lo1: define and graph the price elasticity of demand. Price elasticity of demand: how responsive consumers are to a change in price. Quantity demanded is relatively unresponsive to a change in price. Formula: q / p . (q+q")/2 (p+p")/2. If price decline inelastic, total revenue decreases. Consumers are more responsive to a given price change when the initial price is high than its low. Demand becomes less elastic as we move down the curve. Constant-elasticity demand curves: elasticity is same all along the curve. Price is no object, price change has no effect on quantity demanded. Percent change in price cause an exact opposite percent change in.

Related Questions

Use the following demand schedule for a monopolist to calculate total revenue and marginal revenue. For each price, indicate whether demand is elastic, unit elastic, or inelastic. Using the data from the demand schedule, graph the demand curve, the marginal revenue curve, and the total revenue curve. Identify the elastic, unit elastic, and inelastic segments along the demand curve.

Price (P)	Quantity Demanded (Q)	Total Revenue	Marginal Revenue	Price elasticity of demand
$5.00	0
4.50	1
4.00	2
3.50	3
3.00	4
2.50	5
2.00	6
1.50	7
1.00	8
0.50	9
0	10

ivoryyak837

Price (P)	Quantity Demanded (Q)	Total Revenue	Marginal Revenue	Price elasticity of demand
$5.00	0
4.50	1
4.00	2
3.50	3
3.00	4
2.50	5
2.00	6
1.50	7
1.00	8
0.50	9
0	10

scarletmammoth140

interval (or arc) elasticity

cross-price elasticity

price elasticity of demand

elastic demand

income elasticity

inelastic demand

inframarginal units

marginal revenue

point elasticity

price effect

quantity effect

total revenue

unitary elastic demand

1. __________________ A measure of consumersâ sensitivity or responsiveness to changes in the price of a good or service.

2. ___________________ When the percentage change in price (in absolute value) is more than the percentage change in quantity demanded (in absolute value).

3. ___________________ When the percentage change in quantity demanded (in absolute value) is more than the percentage change in price (in absolute value).

4. ___________________ When the percentage change in quantity demanded (in absolute value) is just equal to the percentage change in price (in absolute value).

5. ___________________ Total amount paid to a producer for a good or service P * Q.

6. ___________________ The effect on total revenue of a change in price, holding quantity constant.

7. ___________________ The effect on total revenue of a change in quantity, holding price constant.

8. ___________________ An elasticity calculated over an interval of a demand curve or demand schedule.

9. ___________________ Elasticity at a specific price or point on a demand curve.

10. ___________________ A measure of how responsive quantity demanded is to a change in income, all other things constant.

11. ___________________ A measure showing how responsive the quantity demanded of one good is to changes in the price of another good, other factors constant.

12. ___________________ The additional revenue received by producing and selling one more unit of output.

13. ___________________ Units of output that could have been sold at a higher price had the firm not lowered its price to sell additional (marginal) units.

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ECON 1 Lecture Notes - Lecture 27: Normal Good, Marginal Cost, Economic Equilibrium

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