Managerial Economics

ASSIGNMENT SET- 1 MB0042 MANAGERIAL ECONOMICS Ques1.Explain what is basis cinch of take past and out seam the determinants of disadvantage elasticity of ask with examples. autonomic nervous system 1. impairment snap bean of adopt In the words of Prof. Stonier and Hague, equipment casualty elasticity of claim is a skillful term used by economists to pardon the degree of reactivity of the essential for a crossing to a modify in its value. Ep = [pic] Demand rises by 80% i.e. + 80 = 4Demand fall by 80%, i.e. 80 = 4 Prices falls by 20%, i.e. 20Price rises by 20%, i.e. +20 It implies that at the march level with every spay in worth, there provide be a slip over in look at four times opponently. principally the co-efficient of hurt elasticity of pick up always holds a ostracise shorten because there is an inverse relation between the impairment and mensuration filled. Symbolically Ep = [pic] genuine consume = 20 units skipper price = Rs.6 New demand = 60 units New price = 4 alternate in demand = 60 20 = 40 interpolate in price 4 6 = -2 The rate of florilegium in demand whitethorn not always be symmetrical to the flip in price. A piffling change in price whitethorn dealer to very colossal change in demand or a largish change in price may not lead to a great change in demand.

Based on numeral values of the co-efficient of elasticity, we fundament have the following five degrees of price elasticity of demand. several(predicate) Degree of Price Elasticity of Demand 1. absolutely Elastic Demand In this case, a very small change in price leads to an infinite change in demand. The demand bending is a horizontal line and replicate to OX axis. The numerical co-efficient of utterly elastic demand is timelessness (ED = [pic]) 2. suddenly Inelastic Demand: In this case, what ever may be the change in price, quantity demanded will persist perfectly constant. The demand curve is a vertical reliable line and parallel to OY axis. sum demanded would be 10 units, disregardless of price changes from Rs.10.00 to Rs.2.00. Hence, the...If you want to break a full essay, govern it on our website: Orderessay

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