Illustrates the significance of elasticity
Illustrates the significance of elasticity?
Expert
Significance of Elasticity is explained here with some important points:
The perception of elasticity of demand is more of practical importance:
1. Production: Producers usually decide their production level on the origin of demand for their product. Therefore elasticity of demand helps to fix the level of output.
2. Price fixation: Each seller under monopoly and imperfect competition has to take in account the elasticity of demand whereas fixing their price. When the demand for the product is inelastic then he can fix a higher price.
3. Distribution: Elasticity assists in the determination of rewards for factors of production. For illustration, when the demand for labour is inelastic, trade union can increase wages.
4. International trade: This perception helps in determining the terms of trade among two countries. Terms of trade, means rate at that domestic commodity is exchanged for foreign commodities.
5. Public finance: It assists the government in formulating tax policies. To impose tax on a commodity, the government must take in consideration the demand elasticity.
6. Nationalization: Elasticity of demand assists the government to decide regarding nationalization of industries.
7. Price discrimination: A manufacture can fix a higher price for the product that have inelastic demand and lower price for product that have elastic demand.
8. Others: The notion elasticity of demand also assisting in taking other vital decision for example: finding out the price of joint product and take over decision.
Illustrates the opinion of Samuelson for explaining Law of Demand?
When the real wage raises, in that case an additional unit of: (w) labor supplied will buy fewer goods. (x) leisure is more expensive. (y) output need more labor time. (z) capital becomes more highly utilized. Can
The costs of investing in human capital are probably to be borne through an employer when the human capital is: (1) general. (2) marginal. (3) precise. (4) generic. (5) specific. Can someone explain/help me with be
When this purely competitive labor market is firstly in equilibrium at D0L, S0L, a move to equilibrium at D1L, S0L would be inconsistent along with increases in: (w) the price of output. (x) labor productivi
States the term Shift in Demand?
Illustrates the elements of managerial economics as a tool for decision making?
An increase within competitively-set wages tends to cause firms to adjust hence there are reductions into the: (1) amounts of labor most firms hire. (2) value of the marginal productivity of workers. (3) marginal profit from hiring labor. (4) technolo
Derived demand curves for labor slope downwards since: (w) additional workers are usually less skilled and thus deserve lower wages. (x) when another resource is fixed, hiring more workers ultimately reduces output per hour worked. (y) higher wages us
Define the some criticized highlight points of Adam Smith?
Illustrates the barometric pricing briefly?
18,76,764
1938875 Asked
3,689
Active Tutors
1456139
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!