TAILIEUCHUNG - Lecture Managerial economics (Ninth edition): Chapter 6 – Thomas, Maurice

Chapter 6 - Elasticity and demand. In this chapter, you will learn to: Explain how price elasticity of demand (E) is used to measure the responsiveness or sensitivity of consumers to a change in the price of a good, explain the role that price elasticity plays in determining how a change in the price of a commodity affects the total revenue (TR = P × Q) received, list and explain several factors that affect the elasticity of demand,. | Chapter 6 Elasticity and Demand P & Q are inversely related by the law of demand so E is always negative The larger the absolute value of E, the more sensitive buyers are to a change in price Price Elasticity of Demand (E) • Measures responsiveness or sensitivity of consumers to changes in the price of a good 6- Price Elasticity of Demand (E) Elasticity Responsiveness E Elastic Unitary Elastic Inelastic Table 6- Price Elasticity of Demand (E) Percentage change in quantity demanded can be predicted for a given percentage change in price as: % Qd = % P x E Percentage change in price required for a given change in quantity demanded can be predicted as: % P = % Qd ÷ E 6- Price Elasticity & Total Revenue Elastic Quantity-effect dominates Unitary elastic No dominant effect Inelastic Price-effect dominates Price rises Price falls TR falls TR rises No change in TR No change in TR TR rises TR falls Table 6- Factors Affecting Price Elasticity of Demand Availability of

• Kinh tế học
• Managerial economics
• Lecture Managerial economics
• Microeconomic theory
• Economic theory
• Price elasticity of demand
• Demand curve
• Market interactions
• Fundamentals of managerial economics
• Marginal analysis
• Marginal benefit
• Economic principles
• Kinh tế học quản lý
• Price discrimination
• Monopolistic competition
• Oligopoly games
• Traditional oligopoly models
• Capital market
• Labour market
• Economic equations
• Economic applications
• Economic applications of derivatives
• Economic application
• Multi variable functions
• Constrained optimization
• Scatter diagram
• Forms of money
• Monetary policy
• Perfect competition
• Demand function
• Supply function
• Quantitative demand analysis
• Theory of individual behavior
• Demand estimation
• Production function
• Costs of production
• Organizing production