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UNIT 5: Elasticity and its Application (độ đàn hồi và ứng dụng của nó) -…
UNIT 5: Elasticity and its Application (độ đàn hồi và ứng dụng của nó)
Elasticity
a number that shows how much demand or supply changes when something else changes.
Thing determines(quyết định) price elasticity
Price elasticity is
higher
when this goods have
close substitutes
(hàng thay thế gần)
example:
rice => elasticity is higher
Sunscreen(kem chống nắng) has
no close substitutes
Price elasticity is
higher
for
narrowly
(hẹp) goods
“Blue Jeans” higher elasticity than “Clothing”
Price elasticity is
higher
for
luxuries
than for
necessities
(nhu yếu phẩm)
“medicine” higher elasticity than “Caribbean Cruises”
Price elasticity is
higher
in the
long run
than the
short run
.
Price Elasticity and Total Revenue
if you ↑ price, revenue↓ or ↑?
Price elasticity of demand
> 1
lower Q , higher P
revenue falls↓
Price elasticity of demand
< 1
lower Q , higher P
revenue rises↑
Price Elasticity of Demand
= (% change in Qd(Quantity Demand)) / (% change in P)
Calculating % Changes
(end value – start value) x 100% / (start value)
bỏ
% thay đổi
khác nhau
giữa: từ A đến B và từ B đến A
solution
(end value – start value) x 100% / (midpoint)
example: The price elasticity of demand equals: 1,8
=> price↑1% => demand↓1,8%
Price Elasticity of Supply
= (% change in Qs(Quantity Supply)) / (% change in P)
Thing determines(quyết định) price elasticity
Price elasticity is
higher
in the
long run
than the
short run
.
Price elasticity is
higher
in
change the quantity
they produce