Tuesday, 26 April 2011
Elasticity and Revenue
Price Elasticity of demand measures on how sensitive consumers are to a change in price.
Two methods to determine elasticity:
- Total Revenue Approach
- Elasticity of Demand Coefficient
Total revenue will fall, if demand is elastic and price rises.
Total revenue = Price * Quantity
Two methods to determine elasticity:
- Total Revenue Approach
- Elasticity of Demand Coefficient
Total revenue will fall, if demand is elastic and price rises.
Total revenue = Price * Quantity
Monday, 18 April 2011
Law of inceasing costs as it relates to the whole economy
"As the quantity produced of any particular item increases, its per unit cost of production rises."
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