You are welcome to ask any questions on Economics. Though you might also like to try google custom search (top right) to see if the topic has been covered before.
I am looking to explain economic principles / ideas/ recent developments in economics. I can’t promise to answer, but will try if it meets the criteria below.
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- I aim to try and simplify economics; as a rough guide I would aim at an understanding similar to a good British A Level student.
- I am looking to explain economic principles / ideas/ recent developments in economics.
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why does different countries use different methods to control inflation and deflation?
AS A LONG TERM INVESTMENT , WOULD WE RATHER INVEST MONEY IN AN INDUSTRY THAT IS INCOME ELASTIC OR INCOME INELASTIC? PROVIDE AN EXAMPLE OF EACH AND INDICATE ANY PROVISIONS YOU MIGHT MAKE REGARD TO YOUR ADVICE
Hi, I’m hoping you can explain why PED varies along a demand curve. I’ve watched multiple videos and I can see that PED does vary but I’m finding this quite confusing… does this mean that a product doesn’t have a single price elasticity – it completely depends upon the price being charged? And why have we been taught that an inelastic demand curve is drawn steeper and elastic less steep, if elasticity varies along the demand curve (dont they all have an elastic and I elastic section)? Is there such thing as an inelastic demand curve if actually all demand curves are elastic at the top half? How would a firm know their PED if it’s different at all prices – how do they know whether to their price up or down to raise revenue? I’m not too sure if this question is related but all videos I have watched have shown quantity decreasing by the same amount each time price is put up by £1, but surely demand wouldn’t change by the same absolute amount each time (or maybe it would?)? Also how does the mid point of the demand curve have unit elasticity if this is a single point, not a change between 2 prices/quantities?
I have asked my teacher to explain but she says I don’t need to know exactly why for our a level specification… but it’s really confusing me! I’ve applied to do an economics degree and feel like this could be something I’m expected to understand.
Thank you!
PED measures % change so If Q goes from 1 to 2 that is 100% change in Q.D. – so more likely to be elastic. If Q goes from 100 to 101 – only 1% change. Your teacher is right you don’t need to worry too much at this stage. It is more to do with maths and calculus.
In addition to my previous question… a kinked demand curve shows elastic demand at higher prices and inelastic demand at lower prices – but isn’t this just a normal demand curve as ped varies this way along a demand curve anyway… so why are the two drawn differently?
I hope my questions have made some sort of sense. Thank you for your help
Can you provide me with example that explains and relate productive efficiency and allocative efficiency to help me better understand how they work together?
in my textbook, it says that income is affected by gdp. Isn’t that wrong since gdp is affected by income. The higher the income, the more products people would buy and this would increase gdp. I’m really confused. Does gdp affect the income in some other way?