AP_Krugman_Textbook
However, in the case of an inferiorgood, a good for which demand increases when in- come falls, the income and substitution effe ...
and (46-2) % change in price = × 100 In Figure 46.1, we see that when the price rises from $20 to $21, the quantity demanded fal ...
when economists talk about the price elasticity of demand, they usually drop the minus sign and report the absolute value of the ...
module 46 Income Effects, Substitution Effects, and Elasticity 463 Section 9 Behind the Demand Curve: Consumer Choice To calcula ...
price are (Q 1 ,P 1 ); at point 2 they are (Q 2 ,P 2 ). Then the formula for calculating the price elasticity of demand is: (46- ...
module 46 Income Effects, Substitution Effects, and Elasticity 465 Section 9 Behind the Demand Curve: Consumer Choice If a 2% c ...
What you will learn in this Module: 466 section 9 Behind the Demand Curve: Consumer Choice The difference between elastic and i ...
So a horizontal demand curve implies an infinite price elasticity of demand. When the price elasticity of demand is infinite, ec ...
Panel (c) shows a case of elastic demand when the toll is raised from $0.90 to $1.10. The 20% price increase causes the quantity ...
module 47 Interpreting Price Elasticity of Demand 469 Section 9 Behind the Demand Curve: Consumer Choice is $0.90. So the total ...
470 section 9 Behind the Demand Curve: Consumer Choice But then, you may ask, what is the net ultimate effect on total revenue: ...
■ When demand is unit-elastic,the two effects exactly balance each other out; so a fall in price has no effect on total revenue. ...
47.4 shows the corresponding demand curve. The lower panel illustrates the same data on total revenue: the height of a bar at ea ...
module 47 Interpreting Price Elasticity of Demand 473 consumption fell very little because there were no close substitutes for g ...
474 section 9 Behind the Demand Curve: Consumer Choice Tackle the Test: Multiple-Choice Questions A perfectly elastic demand cu ...
What you will learn in this Module: How the cross-price elasticity of demand measures the responsiveness of demand for one good ...
if they are not close substitutes, the cross-price elasticity will be positive and small. So when the cross-price elasticity of ...
The Price Elasticity of Supply In the wake of the flu vaccine shortfall of 2004, attempts by vaccine distributors to drive up th ...
1 (10%/10%) and supply is unit-elastic. If the quantity supplied increases by 5%, the price elasticity of supply is 0.5 and supp ...
supplied, the price elasticity of supply would be virtually infinite. A horizontal supply curve such as this represents a case o ...
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