Question

In: Economics

make a detail comparison between demand and supply curves and elasticity and elasticity curves .

make a detail comparison between demand and supply curves and elasticity and elasticity curves .

Expert Solution

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Question:

Answer:

Demand Curve:

The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period of time. Price and the quantity demanded for a good or service have a reverse relationship or move together in the opposite direction. When price increase the quantity demanded for a good or service decrease and vice-versa.

Supply Curve:

The supply curve is a graphic representation of the correlation between the cost of a good or service and the quantity supplied for a given period. The price and quantity supplied of a good or service move together in the same direction. It means when price increase the quantity supplied of a good or service increase and vice-versa.

Elasticity:

Elasticity is a micro economic concept, measure the change in the quantity demanded for a good or service in relation to price changes of that good or service.

Elasticity of Demand:

The price elasticity of demand is the measure of the % change in quantity demanded to a % change in price for a specific good or service.

Price elasticity of Demand = % change in quantity demanded/ % change in price

Elasticity of Supply:

The price elasticity of supply is the measure of the % change in quantity supplied to a % change in price for a specific good or service.

Price elasticity of supply = % change in quantity supplied/ % change in price

Elasticity curves:

The elasticity curve is a graphical representation of the relationship between the % change in quantity demanded and % change in price for a given period of time.

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Rahul Sunny answered 1 year ago

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