Price elasticity of supply

If elasticity is unitary, the increase in tuition would not cause any change revenue; if it is elastic, implies that raising tuition would cause a downfall in revenue; if it is inelastic demand, raising tuition would lead to increase in revenue (Rios, McConnell & Brue, 2013). Arguably, revenue, R for NSU is obtained by multiplying price, P (in this case tuition fee) with the quantity sold, T (in this case enrolment) i.e. R = P*Q. thus, by differentiating it with respect to price, P, it is…

whether or not each of the determinants of elasticity would make a demand for a good to be more elastic, let choose the movies as a good. From the availability of substitutes, movies have more elastic demands because, in the case of where the price has been increased, there are alternatives to watch perhaps the same movie for a lower price. In regards to the time, if a particular movie on DVD cost $20 for an extended period, it would have more elasticity of demand because people would consider…

Supply also refers to the willingness of the seller to sell his products at a given price. Supply can be influenced by many reasons and these are called the determinants of Supply. 1. Price – Price is the main factor that influences demand. In fact price and supply have a direct relationship. If the price of a product increases, supply increases simultaneously. This is because the seller wants to produce more and more…

Demand is the consumers’ willingness to buy goods or services at any given price whereas supply is the producers’ willingness to sell goods or services at any given price. Demand and supply framework can be used to understand the reason of price changes, for example, in the UK housing market. “According to Halifax, since 1983, the UK house prices have risen by 101%” (The Investor, 2012, para.7). Demand and supply explanation can be used to understand this case. The population of the UK is…

exhibit an elastic demand: A) the shorter the time period in which people have to adjust to any price change. B) the less elastic is the demand for any complementary goods. C) the lower the price of the good relative to other goods. D) the more people consider the good a luxury. 27. When two goods are complementary, the cross-price elasticity of demand: A) is positive. B) equals zero. C) is negative.…

than 22 million farmers, altogether up to 100 million people are involved in the cultivating process, trading and retailing of the product globally. The aim of this report is to answer the questions given in the study case regarding to the demand and supply for Starbucks coffee. Starbuck Corporation is a company that purchase, sell and roast whole bean and rich-brewed coffees, espresso beverage, a selection of food items and coffee related a selection of quality teas, it is also the premier…

if all the remaining producers were able they would massively increase supply and decrease OPEC market share, with a big enough response the price of oil would approach competitive allocation. OPEC must therefore take into account non-members when setting the price. Salant’s model argues that due to the presence of a competitive fringe the cartel must set the price lower than the monopoly price, reduce output and let the price rise rapidly. This implies that the cartel raises the present value…

of price elasticity of demand? [10] For some products buyers are price sensitive (products are elastic), and for some products buyers are not price sensitive (products are inelastic). People are very sensitive to one products price change if the product has a similar product in the market. But sometimes when the price of a motor bike increases by 15%, the consumers are affected by it, but on the other hand when price of salt increases by 20% people aren’t affected by that much. The price…

both oil production and prices, therefore this affect both the link between oil prices and scarcity, and an investors decision as to whether they should open a well in the North Seas. OPEC is refusing to cut production despite calls by members such as Venezuela to reduce output, this is largely due to Despite having over 80% of the worlds reserves OPEC only accounts for roughly 33% of the worlds supplies, this means that if OPEC were to cut production in order to raise prices, the reduction in…

As a result of supply not being able to keep up with growing demand, the price of pork in China has risen sharply. In response, the Chinese government is prepared to and has enacted a number of measures to alleviate the high prices. Their aim in doing so is to decrease the price until producers can increase their own supply to a sustainable level. The high price has arisen as producers of pork have not been able to supply enough of the product in response to the growing demand. Pork, which is a…