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jadeswan0Lv1
28 Sep 2019
Discuss the differences between elasticity of supply and elasticity of demand answering the following equations:
A) If the elasticity of demand in its absolute value is close to 2.5, is this market elastic or inelastic?
B)If the elasticity of supply in its absolute value close to .95. Is this market elastic or inelastic for suppliers?
C) If the value of elasticity is close to -1.25, do we speak about the supply or demand, and how elastic is the market from your point of view (elastic vs inelastic)?
D) How the value of total revenue is related to the value of elasticity? Why and how can we use the total revenue test for elasticity? how elasticity value can be applied by the authority of the city/state to make correct decisions in regards to taxation policy for consumer items?
Discuss the differences between elasticity of supply and elasticity of demand answering the following equations:
A) If the elasticity of demand in its absolute value is close to 2.5, is this market elastic or inelastic?
B)If the elasticity of supply in its absolute value close to .95. Is this market elastic or inelastic for suppliers?
C) If the value of elasticity is close to -1.25, do we speak about the supply or demand, and how elastic is the market from your point of view (elastic vs inelastic)?
D) How the value of total revenue is related to the value of elasticity? Why and how can we use the total revenue test for elasticity? how elasticity value can be applied by the authority of the city/state to make correct decisions in regards to taxation policy for consumer items?
Chika IlonahLv10
28 Sep 2019
Related textbook solutions
Related questions
For each of the following absolute values of price elasticity of demand, indicate whether demand is elastic, inealstic, or unit elastic. In addition, determine what would happen to total revenue if a firm raised its price in each elastic range identified.
| Absolute Value | Elasticity | Effects of Price Increase | |
| a | Ep=2.5 | ||
| b | Ep=1.0 | ||
| c | Ep=∞ | ||
| d | Ep=0.8 |
