INTRODUCTION
What is Elasticity?
The degree to which a demand or supply curve reacts to a change in price is the curve's elasticity. Generally in business or in economics, the elasticity is referred as degree to which consumers, individuals or producers change their demand or amount supplied in response to price or income changes.
Variety of Demand Curves:
Elastic Demand:
Quantity demanded responds substantially to the changes in the price. (Elasticity > 1)
Inelastic Demand:
Quantity demanded responds only slightly to the changes in the price. (Elasticity < 1)
Unitary Elasticity:
Elasticity = 1
Perfectly Elastic Demand:
Quantity demanded does not respond to a change in price. (Elasticity = ∞)
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If elasticity is high, companies compete with each other in businesses on price and they required to have a high volume of sales transactions in their businesses to remain solvent. Firms that are inelastic, on the other hand, have products and services that are must-haves and enjoy the luxury of setting higher prices.
Beyond prices, the elasticity of a good or service directly affects the customer retention rates of a company. Businesses often strive to sell goods or services that have inelastic demand; doing so means that customers will remain loyal and continue to purchase the good or service even in the face of a price increase.
WHOLESALE PRICE INDEX (WPI):
The wholesale price index is an index that measures and tracks the changes in the price of goods in the stages before the retail level. WPI shows the average price change of goods included in the index and is often expressed as a ratio or percentage, and the change is one indicator of a country's level of inflation.
WFI can is calculated by assuming the WPI value of Base year as 100.
WPI= ((P-Q)*100)/Q Where P= Price in Present
Elasticity is the responsiveness of demand or supply to the changes in prices or income. There are various formulas and guidelines to follow when trying to calculate these responses. For instance, when the percentage of change of the quantity demanded is greater then the percentage change in price, the demand is known to be price elastic. On the other hand, if the percentage change in demand is less than then the percentage change in price; Like that of demand, supply works in a similar way. When the percentage change of quantity supplied is greater than the percentage change in price, supply is know to be elastic. When the percentage change of quantity supplied is less then the percentage change in price, then the supply then demand is known to be price inelastic.
This paper presents how Labeling theory and strain theory can explain the crimes that The White family from West Virginia commit on a daily basis. The wonderful White of West Virginia portrays corruption and poverty. They do not conform to any authority or rules; all they want to do is fuss, fight and party. The White family takes part in shoot-outs, robberies; gas huffing, drug dealing, pill popping and murders. They are famously known for their Hill Billy tap dancing and wild criminal ways. West Virginia being the poorest state in the United States they do not have the resources to a good education system or available employment. Therefore, frustration sets in, leading to failed aspirations causing the Whites to resort to violent and illegal ways to survive in a declining economy, to obtain a slight chance to their perspective of the American dream. However, being labeled as the rebels of the south just makes that slight chance of the American dream much harder to obtain.
I believe that the purpose of doing this is to allow me to demonstrate my understanding of Elastic potential energy. And the projectile concepts of the effect of changing potential into kinetic energy and for me to demonstrate my ability to apply elastic potential energy to a scientific investigation.
Deviance is a natural part of and necessary for stability and social order in society, this according to functionalist theorist Emile Durkheim (MindEdge, Inc., 2016). Traditionally, society is generally successful in providing motivation for individuals to aspire for goals of some sort, whether through wealth, prestige or perceived power (Henslin, 2011). However, from a functional perspective, theories have been developed in identifying when lawful and equal access is not afforded to certain individuals in the process of obtaining such goals. This restriction and inequality to opportunity for access in the quest to achieve success is what is now referred to as structural strain theory, which was developed by sociologist Robert Merton (Henslin,
Inelastic demand means that an increase or decrease in price will not significantly affect demand for the product. In spite of the rising prices for the Blue Jays tickets, fans were expected to turn out in large numbers. This inelastic demand for the tickets can be attributed in large part of the fact that their teams plays so well in 1998, and another factor is that the Blue Jays fan could never stay away from their team. Another inelastic demand for the Blue Jays tickets is that there is no other locally substitute team.
The Keynes effect says that higher price level will cause a lower real money supply, which would increase the interest rates from the financial market. The demand curve illustrates a relationship by the quantity of output and the price level of the aggregate demand. This demand is expressed over a fixed level of nominal supply in money. Some of the factors that shift the aggregate demand curve to the right are the increase in money supply, government spending or consumption spending or as simply decreasing taxes. The aggregate demand curve is the total sum of every individual sector of the economy, usually described a linear sum.
When demand is elastic as with Coca Cola products price changes affect total revenue. When the price increases revenue decreases and when the price decreases revenue increases. For Coca Cola if they notice a decrease in revenue they would offer products at a discount to increase revenue. They do this quite often with sales such buy 2 20 oz. bottles for $3 instead of the normal $1.89 each price
The law of demand states that if everything remains constant (ceteris paribus) when the price is high the lower the quantity demanded. A demand curve displays quantity demanded as the independent variable (the x-axis) and the price as the dependent variable (the y-axis). http://www.netmba.com/econ/micro/demand/curve/
When a suppliers' costs changes for a given output, the supply curve shifts in the same direction. For example, assume that someone invents a better way of growing corn so that the cost of corn that can be grown for a given quantity will decrease. Basically producers will be willing to supply more corn at every price and this shifts the supply curve outward, an increase in supply. This increase in supply...
A change in quantity supplied is just a movement from one point to another in the supply curve. In opposite, the cause of a change in supply is a change in one the determinants of supply that shifts the curve either to the left or the right. These determinants are the resource prices, technology, taxes and subsidies, producer expectations, and number of sellers. An equilibrium price is required to produce an equilibrium quantity and a price below that amount is referred as quantity supplied of zero no firms that are entering that particular business. If the coefficient of price is greater than zero, as the price of the output goes up, firms wants to produce more of that output. As the price of the output goes up it becomes more appealing for the firms to shift resources into the production of that output. Therefore, the slope of a supply curve is the change in price divided by the change in quantity. The constant in this equation is something less (negative number always) than zero because it requires strictly a positive...
One method that Toyota can consider is using the price elasticity of demand to determine whether to increase or decrease the sale price of their automobiles. The responsiveness or sensitivity of consumers to a price change is measured by a product's price elasticity of demand (McConnell & Brue, 2004). Market goods can be described as elastic or inelastic goods as change in quantity demanded for that good. If demand is elastic, a decrease in price will increase total revenue. Even though a lower price would generate lower sales revenue per unit, more than enough additional units would be sold to offset lower price (McConnell & Brue, 2004). In a normal market condition, a price increase leads to a decreased demand, and a price decrease leads to increased demand. However, a change in income affecting demand is more complex.
2. A composite index 2.1 Laspeyres Price Index The most commonly used weighted price index is the Laspeyres Price Index named after its inventor. It is a weighted aggregate price index that uses the quantities in the base period/ year as weights (Harper, 1991,p215). In essence, Laspeyres price index for the year measured shows the extent of price changes since base year on the assumption that the expenditure pattern was the same in the year measured as in base year. Thus, only price is allowed to change and the index for the current period reflects this price.
Figure I I .4 illustrates the effects of an increase in demand. OD is the original demand curve so that the equilibrium price is P and quantity Q is demanded and supplied.
That is, it is sensitive to price change, and also to the quantity demanded. This means that if many people are consuming a good, the demand is greater than if less people are consuming the good. To further clarify, take the example of attending college. In an environment where most of an individual's peers are going to attend college, the individual will see college as the right thing to do, and also attend college to be like his peers. However, in an environment where most of an individual's peers are not going to attend college, the individual will have a decreased demand for college, and is unlikely to attend.
Loyalty customers gain the more cost advantage and benefit, this resist competitors very hard to match. Promoted cost bind to loyal customers to sustainable growing.