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Unit 2.1 - Demand, Supply and Market Equilibrium - Numerical Illustrations
1. If autonomous demand is 12 and slope of demand curve is 2. Find the demand function.
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Unit 2.2 - Elasticity of Demand and Supply
Concept & Types of Elasticity Demand Concept of ED Elasticity of demand refers to the degree of responsiveness in demand for a commodity to the change in any of its determinants. In other words %Δ in Qdx divided by the %Δ in its determinants. First introduced by classical economist A. A. Cournot & J. S. Mill and later on Neo-classical economist, Alfred Marshall developed it in the scientific way in his book "Principle of Economics" published in 1890 A.D. Symbolically, Ed = % Δ in Qd / % Δ in its determinants Price Elasticity of Demand (PED) Ep means how strongly do consumer react (by using less) if you raise your product price. So, Ep is the reaction of quantity on price. Symbolically, Price Elasticity of Demand Degrees/Types of PED 1] Perfectly Elastic Demand Perfectly Elastic Price Elasticity of Demand 2] Perfectly Inelastic Demand Perfectly Inelastic Price Elasticity of Demand 3] Unitary Elastic Demand...
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