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What is market elasticity?

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Yusra Anees
Yusra AneesLv10
29 Mar 2021
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Related questions

39. Holding all else constant, if a pencil manufacturer increases production by 20 percent when the market price of pencils increases from $0.50 to $0.60, what is the price elasticity of supply, using the midpoint method? a, elastic, since elasticity is equal to 1.11 b. inelastic, since elasticity is equal to 1.11 c inelastic, since elasticity is equal to 0.90 d. elastic, since elasticity is equal to 0.90

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?

The more substitutes that exist in a market:

a. higher is the elasticity

b. lower is the elasticity

c. higher is the market share of each product

d. all of the above

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