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Economics (Demand (Elasticity (Price elasticity of demand (Revenue
-P*Q…
Economics
Demand
-
Shift of curve
Factors
- Increase in buyers
- change in tastes
- expectations
- income - inferior/normal
- price of related goods - complement/substitutes
Elasticity
-
Income elasticity of demand
- don't drop minus sign, has info
- income and quantity
- tells you normal/inferior good
Cross price elasticity of demand
- don't drop minus sign, has info
- price of comp/sub and quantity
- tells you complement/substitute price
-
Function
Qd = x - P, rearrange in terms of P to find gradient and intercepts on graph
Supply
Elasticity
-
Factors
- production flexibility
- long run more flexible
-
Shift of curve
Factors
- Technology
- cost of inputs
- expectations
- number of sellers
-
Equilibrium
-
Finding
- equation of Qs=Qd
- solve for P
- sub P back in to find Q
Allocation
-
Ineffecient
- doesn't maximise TS
- deadweight loss present
Price floor
Consumers
- worse off
Producers
- insider/ousider theory
Taxes
Elasticity affects
- tax revenue
- D.W. loss
- tax incidence
all about Q drop
-
-
price ceiling
Consumers
- insider outsider theory
Producers
- worse off