Microeconomics ( Short Written Response ) Essay

The elasticity of demand measures the buyer’s reaction to price as its changing. “Economists measure the degree to which demand is price elastic or inelastic with the coefficient E d, defined as E d = percentage change in quantity demanded of product X/ percentage change in price of product X” (McConnell, C. 2011). Therefore, Ed=∆Qd/∆Pd. When elasticity of demand is measured less than one, demand is considered to be inelastic. The coefficient in an inelastic range is less than one. When this takes place the percentage change in price is more than the percentage change in quantity. It can be said that when inelastic demand is present that quantity becomes less effected by price changing.

I have read and understand the Rules Relating to Awards (Rule 3 Section 18 – Academic Misconduct Including Plagiarism) as contained in the SCU Policy Library. I understand the penalties that apply for plagiarism and agree to be bound by these rules. The work I am submitting electronically is entirely my own work.

Follow these procedures: If requested by your instructor, please include an assignment cover sheet. This will become the first page of your assignment. In addition, your assignment header should include your last name, first initial, course code, dash, and assignment number. This should be left justified, with the page number right justified. For example:

Please attach this as a front cover to your assignment and then Email to: assignments@amacusltd.co.uk

Elasticity of demand is measured as the percentage change in quantity demand divided by the percentage change in price .

I have read and understand the Rules Relating to Awards (Rule 3.17) as contained in the University Handbook. I understand the penalties that apply for plagiarism and agree to be bound by these rules.

Elasticity is a measure of the responsiveness of demand to changes in the price of a good or service. In the case of Steam Scot, when the price rises from 4 to 5, demand falls from 60,000 to 40,000 units. The original equilibrium market price of 4 pounds resulted in demand of 60,000 units and this generated revenue of 240,000 pounds. When the prices increased to 5 pounds the resulting demand is 40,000 units, and this generates total revenue of 200,000 pounds. When market price changes from 4 pounds to 5 pounds 40,000 pounds of revenue are lost in this indicates an elastic price elasticity of demand.

Price elasticity of demand is an economic measure that is used to measure the degree of responsiveness of the quantity demanded of a good to change in its price, when all other influences on buyers remain the same.

Elasticity of demand represented as “Ed” is defined as a “measure of the response of a consumer to a change in price on the quantity demanded of a good” (McConnell, 2012). Determinants for elasticity of demand would include the substitutability of a good, proportion of a consumer 's income spent on a good, the nature of the necessity of a good and the time a purchase is under consideration by the consumer. Furthermore, elasticity of demand is calculated with this formula:

This submission is entirely my own original piece of work. It has not been submitted for a previous assessment in

Elasticity of Demand also referred to as Price Elasticity of Demand in Economic measures is based on the effect of how the quantity demanded is changed when there is change in the price.With respect to price it is the quantity demanded responsiveness degree. For example lets consider a case in the below figure, where there is elastic demand when the curve is almost flat. You can see that, the quantity decreases a lot if there is a change in price from $.75 to $1. There can be many reasons for this

The price elasticity of demand shows the relationship that exists between the price of a product and the quantity demanded. The PED can also be used to calculate the effects of the change in product price on the amount of the product demanded. The rate at which a change in price affects the quantity demanded varies considerably. The PED coefficient

Nowadays in modern developed market change in prices and other factors are very expected. The change in one of the factors for instance price and effect of it on another factor like demand or supply are measured by elasticity. Elasticity is the measure of how the change in one of the factor will be affected on the other factors. Elasticity measures extent to which demand will change. Measure easily can be calculated in

I have read and understand the Rules relating to Awards (Rule 3.18) as contained in the University Handbook. I understand the penalties that apply for plagiarism and agree to be bound by these rules. The work I am submitting electronically is entirely my own work

3. Your assignment should be typed using 12 point Times New Roman font and 1.5 line spacing.