--%>
Assignment Help - homework help

Explain the way of Price Elasticity of Demand

Explain the way of Price Elasticity of Demand.

E

Expert

Verified

Price Elasticity of Demand can be measured as given below:

Price Elasticity = Proportionate change in quantity demanded/Proportionate change in price
                         OR

Ep = (Change in Quantity demanded / Quantity demanded)/ (Change in Price/price)

Ep = ((Q2-Q1)/Q1)/((P2-P1) /P1),

Here: Q1 stands for Quantity demanded before price change
Q2 stands for Quantity demanded after price change
P1 stands for Price charged before price change
P2 stands for Price charge after price change.

   Related Questions in Managerial Economics

  • Q : Supply of Labor The firm in this

    The firm in this illustrated graph is clearly: (1) price taker in the sale of its output because of the shapes of the VMP and MRP curves. (2) price taker in the purchase of labor when this can hire as several workers as this chooses at roughly of $13 per hour. (3) mon

    		•
  • Q : Hiring more labor in profit maximization

    When a firm hires an additional worker who adds $100 worth of output daily, and adds $50 daily to the firm’s costs, in that case the firm must: (w) hire more labor. (x) hire less labor. (y) not change its employment of labor. (z) sell off some o

    		•
  • Q : Area of decision making in Managerial /

    Illustrates the area of decision making in Managerial / Business Economics?

    		•
  • Q : Income effect and substitution effect

    When comparing these labor supplies, which are clear by the income effect of a modification in wage rates is: (w) negative for Morgan and positive for Chandra. (x) less powerful than substitution effect for both of such workers. (y) positive for Morgan and negative fo

    		•
  • Q : Elasticity of the Supply of Labor of

    This supply of labor worker is roughly unitarily wage elastic as the wage rate increases from: (1) $5 per hour to $10 per hour. (2) $5 per hour to $25 per hour. (3) $10 per hour to $25 per hour. (4) $10 per hour to $40 per hour. (5) $25.01 per hour to

    		•
  • Q : Illustrates the Expert Opinion method

    Illustrates the Expert Opinion method of Demand Forecasting?

    		•
  • Q : What is Oligopoly What is Oligopoly?

    What is Oligopoly? Explain in brief.

    		•
  • Q : Allocative and technical efficiency in

    Economy-extensive efficiency needs both allocative and technical efficiency within production and: (w) equity within the distribution of national income. (x) biological efficiency, in that people's basic desires should be met. (y) pol

    		•
  • Q : Marginal Factor or Resource Costs The

    The words “marginal factor costs” or “marginal resource costs” taken as to the: (w) extra cost involved in producing an additional resource. (x) extra cost involved while producing an additional unit of a resou

    		•
  • Q : Introduction of the term Margin of

    Provide a brief introduction of the term Margin of Safety?

    		•