Why Government Regulation Has On Production And Employment

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.

availability of substitutes, and justify how you determine the price elasticity of demand for your firm’s product. b) Explain the factors that affect consumer responsiveness to price changes for this product, using the concept of price

Price elasticity that relates to demand is determined by many factors. Price elasticity is measured by the change in price and the response from consumer demand. The demand of a good or service will vary the price in the item. The most important factor to determine the price elasticity of demand is necessity. If a good is a necessity, the demand will seldom change and the price is able to be adjusted. The demand is the most important due to the freedom it provides for price adjustment and inventory control. With necessity comes an inelastic price. Other factors such as the

14. When the price increases from $4 to $6 and the quantity demanded decreases by 2 units, the price elasticity of demand is

Use the Internet to research two (2) of the leading competitors in the low-calorie frozen, microwavable food industry, and take note of their pricing strategies, profitability, and their relationships within the industry (worldwide).

An example of where substitutions readily exist and can affect the elasticity of the market is laundry soap. There are more than 40 laundry soaps on the market. If there is a fluctuation in price where the purchaser feels their normal brand is getting too expensive or not available, they would be more apt to choosing another brand as basically all laundry soap has the same major ingredients, performs the same function, and seen as an easy choice when the price difference can mean a number of

These two sections should give you a great overview of the chapter. You will get a general preview of most of the vocabulary words. You will also get a preview of what to expect from each section of the chapter by reading the “key concepts and summary.” After you finished reading the “key terms and key concepts and summary”, I strongly recommend you review the graph of a demand/supply diagram. After you have reviewed the diagram, start reading the chapter. While you are reading the chapter, you should take notes. Some of the notes I took included elasticity is >1. For an elastic product price change causes a big change in quantity demanded. An example of an elastic product is restaurant meals. This is because there are many substitutes good; instead of a person going out to eat, can make a meal at home. Inelasticity is <1. For an inelastic product price change causes a small change in quantity demanded. An example of an inelastic product is gasoline. Inelastic products are essential and there are no substitutes. After you finished reading the chapter carefully and took some notes, you should finish off by copying down the formulas. I copied down the following formulas: price elasticity of demand formula, which is percent change in quantity demand divided by percent change in price;

The creation, amendment, rejection or repealing of rules can be defined as rulemaking. Rules are utilized by numerous sections of the government following a passed statue from Congress which can also be referred to as regulations. Regulations do not begin in the executive branch of government where agencies developed. They are created in the Congress, where they are the factors for the establishment of the agency involved or function of an agency. The rules start with a legislative act of Congress. “Congress has enacted laws such as the Administrative Procedure Act, the Regulatory Flexibility Act, the Paperwork Reduction Act, and the Unfunded Mandates Reform Act that require some type of procedure, review, and/or analysis of draft rules by the rule making agencies themselves or by outside parties” (COPELAND, 2008).

While many Americans think the president of the United States have effective control over the economy and see things only in black-and-white, with no room for shades of gray the fact of the matter is, that the president has very little control, if any over the economy. Many economist agree and make a correlation that the president’s control over the economy is like a co-pilot of a plane that’s already on autopilot. The economy falls largely in the hand of the Federal Reserve, which sets monetary policies and is largely independent of the political process. Sure, the president does have the authority to appoint the Chair of the Board of Governors of the Federal Reserve System, but even then, the appointee must be vetted and approved by Congress and it has no obligation to do what the President ask him/her to do.

According to the fallowing article dairy products were once considerate relative “inelastic,” meaning that demand for food staples like milk, butter and cheese varies little with a price. However, with many more alternative for dairy products and more stable prices they are no longer inelastic. Is clearly that the consumers are no just sensitive to prices, but also concern about health for the goods and close substitute like the article mentions Butter and margarine.

Wealth brings power and power can at times bring corruption. In today’s economy where individuals are no longer the concern when it comes to wealth, the global attention is drawn to corporations who hold the majority of our wealth. This calls for us to take cetain measures that can ensure the existence of a socially responsible behavior amongst all corporations, and these measures could be introduced in many forms, quite possibly the most favorable currently being government intervention. However, government intervention is not always the best method for ensuring social responsibility and ethical behavior amongst corporations. A much better alternative is a self-regulatory economy along with a combination of freedom and transparency in order to ensure responsible behavior in corporations, in addition to an increase in efficiency and flexibility in regards to resources and innovation.

What happens when you have a good or service and due to unforeseen circumstances the demand increases? What happens if the price increases? How does this change affect your goods and or services? The Price of Elasticity of Demand can help determine each of these situations and calculate whether the price should be raised or dropped due to cost and demand of a product. Explanation is key; we will use these examples and explain how Price of Elasticity of Demand is used: If the demand for corn increases due to its use as an alternative energy source, what will happen to the supply of corn's substitute such as soybean? What will happen to the price of corn oil? How does the price elasticity of

From all this information we can clearly see that the numerical value of the price elasticity of demand is less than one but more than zero. With this in mind we can state that the demand for fast foods on a whole is inelastic, which means when there is a one percentage change in price there is a less than proportionate change in quantity demanded.

These have been turbulent years, and no man knows the full significance or the permanency of the social changes that have come about.

In the recent years, efficient regulatory regime’ role in the enhancement of the economic growth and development has created a significant attention among the researchers. It is vital to note that regulation undertake numerous forms and the form of regulation strategy embraced by many developing countries has changed over time (Jalilian et al., 2007). From the mid-60s to the later 1980s, market failure was applied in legitimizing the direct involvement of government in the industrious actions in the developing countries, by the enhancement of industrialization through the application