Price elasticity of demand
Answer the following questions in a word or PDF file (no other files will be accepted) and attach with your submission. Write your answers in detail (minimum four lines per response).
What are the determinants of demand? What causes movement along a fixed demand curve and shift in the demand curve?
What are the determinants of supply? What causes movement along a fixed supply curve and shift in the supply curve?
What is the difference between surplus and shortage? What causes surplus and shortage and also discuss the remedy. (Make sure to take into account the price above and below equilibrium).
How do we calculate price elasticity of demand? Provide a numeric example using the standard method and mid-point method.
What are the determinants of elasticity? What are elastic, inelastic and unit elastic demand? Provide examples.
What is the difference between the income and cross price elasticity? What do you mean if the income elasticity is positive and negative?
…………………Answer preview……………………..
The determinants of demand are other factors apart from changes in price that cause the demand curve to shift. The following are the determinants of demand: Income, Consumer tastes and preferences, Price of related goods, demography and future expectations of price changes. Only price changes can result in movements along the demand curve…………………….
APA
380 words
