enow.com Web Search

Search results

  1. Results from the WOW.Com Content Network
  2. Price elasticity of demand - Wikipedia

    en.wikipedia.org/wiki/Price_elasticity_of_demand

    When the price elasticity of demand is unit (or unitary) elastic (E d = −1), the percentage change in quantity demanded is equal to that in price, so a change in price will not affect total revenue. When the price elasticity of demand is relatively elastic (−∞ < E d < −1), the percentage change in quantity demanded is greater than that ...

  3. Elasticity (economics) - Wikipedia

    en.wikipedia.org/wiki/Elasticity_(economics)

    For example, if the price elasticity of the demand of a good is −2, then a 10% increase in price will cause the quantity demanded to fall by 20%. Elasticity in economics provides an understanding of changes in the behavior of the buyers and sellers with price changes.

  4. Demand curve - Wikipedia

    en.wikipedia.org/wiki/Demand_curve

    The elasticity of demand indicates how sensitive the demand for a good is to a price change. If the elasticity's absolute value is between zero and 1, demand is said to be inelastic; if it equals 1, demand is "unitary elastic"; if it is greater than 1, demand is elastic. A small value--- inelastic demand--- implies that changes in price have ...

  5. Law of demand - Wikipedia

    en.wikipedia.org/wiki/Law_of_demand

    The Cross elasticity of demand, also commonly referred to as the Cross-price elasticity of demand, allows companies to establish competitive prices against substitute goods and complementary goods. The metric figure produced by the equation thus determines the strength of both the relationship and competition between the two goods.

  6. Giffen good - Wikipedia

    en.wikipedia.org/wiki/Giffen_good

    Giffen goods are the exception to this general rule. Unlike other goods or services, the price point at which supply and demand meet results in higher prices and greater demand whenever market forces recognize a change in supply and demand for Giffen goods. As a result, when price goes up, the quantity demanded also goes up.

  7. Slutsky equation - Wikipedia

    en.wikipedia.org/wiki/Slutsky_equation

    where ε p is the (uncompensated) price elasticity, ε p h is the compensated price elasticity, ε w,i the income elasticity of good i, and b j the budget share of good j. Overall, in simple words, the Slutsky equation states the total change in demand consists of an income effect and a substitution effect and both effects collectively must ...

  8. Ramsey problem - Wikipedia

    en.wikipedia.org/wiki/Ramsey_problem

    Under Ramsey pricing, the price markup over marginal cost is inverse to the price elasticity of demand and the Price elasticity of supply: the more elastic the product's demand or supply, the smaller the markup. Frank P. Ramsey found this 1927 in the context of Optimal taxation: the more elastic the demand or supply, the smaller the optimal tax ...

  9. Complementary good - Wikipedia

    en.wikipedia.org/wiki/Complementary_good

    An example of this would be the demand for cars and petrol. The supply and demand for cars is represented by the figure, with the initial demand . Suppose that the initial price of cars is represented by with a quantity demanded of . If the price of petrol were to decrease by some amount, this would result in a higher quantity of cars demanded.