ipl-logo

Elasticity Demand In Australia

557 Words3 Pages

Increased revenue can be achieved by reducing the cost of the product and creating more quantity demand. This is the main key factor to increase revenue, however there are other variables such as income, preferences, population etc. The concept of elasticity describes the variation of quantity demand in related to price of the product in a market. Referring to the page 2, showcase the different situation of the market condition. In the 1st chart, the price is increased however the quantity of the demand is minor which means it is in inelasticity condition. Best example is Oil price, assuming other factors for demand will remain consistent. When the oil price increase the customer are still willing to pay the price as there is no alternative …show more content…

Even if a country engaged in producing all the products, the country will not be productive. This can be discussed by bring production possibilities frontier theory and concepts of specialisation and exchange. The production possibilities frontier analyses the low cost of production of two products and highlights the more cost efficiency product allowing a country to gain technological advantage or trading. It means specialization of one product and it has a comparative advantage which allow international trading. Reference to page 2, illustrates production of automobile and fruit of two countries. Currently, Australia is producing 8 tonnes of fruits and 2 thousand of automobile where in Japan is producing 10 thousand of automobile and 2 tonnes of Fruits. It is very much clear from the page 2 calculations, that cost of product for fruits is lower in Australia while production cost for automobile is lower in Japan. It is possible for Australia to focus only on fruit production and Japan can manufacture only automobile then the can trade of their products. In this case Australia can trade fruits and Japan can trade automobile. This will increase their productivity than before. Australia will benefit from increased amount of 5 thousands of automobile where Japan will benefited from increased amount of 4 tonnes of

Show More
Related
890 Words | 4 Pages

Microeconomics ECON212 -1504B-01 Instructor: Joseph Parisi Unit 2- Elasticity Amanda Kranning November 2015 In the laws of economics, when the price of an item goes up, the quantity of demand will decline. Elasticity becomes an integrant part by determining the response of this occurrence. The measurement in change in the quantity demanded in response to change in price is call elasticity for demand.

Read More
547 Words | 3 Pages

This week in chapter six of the book, Economics, written by McConnell, Brue, and Flynn, I have learned about price elasticity of demand and supply, cross elasticity, total revenue, and income elasticity of demand. Through this week I believe the most important concepts are elasticity of supply and demand. Elasticity of demand is the sensitivity of a price change of a product. Elasticity of demand can be influenced by substitutability, proportion of income, luxuries versus necessities, and time. Price elasticity of supply is the responsiveness of producers to a price change in a product.

Read More
790 Words | 4 Pages

For any country that wants to survive in the toughest of times, they need to have good trading capabilities. Very few countries are able to sustain themselves without indulging in intensive trade with other countries. Trading has been considered a good thing in the past, but with the changing world, there are doubts about the benefits of trading. There are some factors that lead to the development of trade networks between countries. When people started to settle in larger towns, the idea that you had to produce absolutely everything for survival, began to fade.

Read More
800 Words | 4 Pages

The authors continue in contradicting this idea of a three-way, triangular trade system by calling it “misleading”. They explain how the trading system has many more factors and is much more than just a “triangle”. “What we call a triangle was really as round as the globe. (37)” The authors give direct evidence of a much more complicated trading system involving many countries.

Read More
1270 Words | 6 Pages

Some examples that are inelastic are keyboards and pens. This concept of things being elastic or inelastic can also be incorporated into macroeconomics. Price elasticity of demand refers to the responsiveness of the consumers to a price change. For example some products that consumers are highly responsive to would be buying coffee at a coffee shop because a small price change can affect a large change in the quantity purchased. Since this product is highly responsive it correlates to this product being elastic.

Read More
505 Words | 3 Pages

This is evident in the simple supply and demand graph; as price goes up, supply will increase as more suppliers will be willing to supply at a high price, but the demand will decrease due to the high price, causing a surplus of products. A real life example would be the milk industry in the United States, where governments put a price floor above the equilibrium price to support the suppliers, causing a great surplus of dairy products. Another example is the San Francisco Earthquake in 1987, after the disaster the demand for bottled water increased drastically, causing a right shift of the demand curve in the market of water, however the supply of bottled water also decreased due to damaged pipes, therefore the price of bottled water increased. Many other suppliers may sell bottled water at that time with a very high price, this is called price gouging. High prices often does two things that benefits the economy, one is that it encourages the consumer to conserve the product and not waste it, the other is that it encourages suppliers to supply when a product is

Read More
447 Words | 2 Pages

3. How do you think people in Japan, China, and Korea were affected by the trade described here? Explain. The people in these countries were able to get what they wanted/needed from other

Read More
619 Words | 3 Pages

What I have just provided addresses the responsiveness, as our reading on page 415 points out, “Price elasticity of demand (Ep) The responsiveness of the quantity demanded of a commodity to changes in its price; defined as the percentage change in quantity demanded divided by the percentage change in price. To determine elasticity of demand it is important consider, availability of substitutes, Short-run versus long run, Percentage of income spent on the product.

Read More
613 Words | 3 Pages

The opposite of this effect is decrease in supplies. Consumers will be willing to pay more for a product or service is that is slowly becoming unavailable due to a decrease in supplies. In return consumers will start to see that the price for that product or service will have a higher price. Corporate decisions are when the corporations basically decide to increase the price. Corporations will usually increase the price for goods and services that consumers need for daily essentials or for products that are becoming

Read More
924 Words | 4 Pages

In the example above, the increase of CPC by 16.3% (from $2.02 to $2.34) caused an increase of clicks by 27% (from 484 to 667). Price elasticity is equal to 1.65 (i.e. 27÷16.3), and its reciprocal value is 0.6. Therefore, in this case, an increase of bids will be profitable if the current ROI is greater than 0.6 (60%). Also Google AdWords bid simulator indirectly shows price elasticity data: <>

Read More
789 Words | 4 Pages

The focus of this book was narrower than the title suggests. It should have been entitled: Arianism among the Germanic Tribes. The book seeks to explain the Germanic (barbarian) acceptance of Trinitarian Christianity within their own world views and time line. Marilyn Dunn notes that the Germanic tribes had a concept of one god, or one supreme "being" or "spirit." This correlates with God the Father who is revealed by his Son, Jesus Christ.

Read More
322 Words | 2 Pages

Selling a well-established product at a similar price to competitors is an option for small retailers who want to draw customers to their businesses. Keeping customers there, however, often means making a change in the market to have an affect on the product. Relying on Competitive pricing is risky if the amount of goods cannot be maintained or if the price suddenly rises. The product prices determine the revenue stream of prices .

Read More
620 Words | 3 Pages

Nuclear energy has long been proposed as a viable alternative to fossil fuels for energy worldwide since the first commercial nuclear power stations began operation in the United States during the 1950s. At present, there are over 435 commercial nuclear power plants operating in 31 countries worldwide, generating 11 percent of the world’s power. Nuclear plants are able to generate large amounts of energy through the splitting of atomic nuclei in a process known as nuclear fission. The amount of energy released by nuclear fission is measured in units of electron volts, eV, and typical figures can range up to 200 million electron volts. Compared to the combustion of fossil fuels, which release only a few electron volts per reaction, nuclear power dominates in terms of power

Read More
1399 Words | 6 Pages

There are many different approaches to development in which countries over the years adopted to further develop and grow their economy. Some countries adopted the approach of import substitution in which they try to decrease their dependency on other nations and protect and foster domestic small companies. The disadvantage for an import substitution based industry, ISI, is although it achieves growth it does so through a greater period of time. On the other hand, growth and development from export oriented industries, EOI, has greater results and is so much faster than import substituting industries. Examples of countries that adopted import based industries are countries of Latin America while countries that adopted Export oriented Industries are countries of East Asia.

Read More
1014 Words | 5 Pages

When the value a customer receives from a product is greater than that of another then they are more inclined to stick with that

Read More

More about Elasticity Demand In Australia

Related Topics

Open Document