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Description
Flashcards by amirahhusna hisham, updated more than 1 year ago
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Created by amirahhusna hisham
over 3 years ago
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| Question | Answer |
| what is demand elasticity | Measures a change in demand for a good when another economic factors changes. |
| what is Price elasticity of demand | ~A measure of the responsiveness of quantity demanded to price changes ~ indicates how much buyer's quantity demanded will change when prices change |
| FORMULA ELASTICITY * KENA HAFAL GAMBA FORMULA | |
| States 5 types of elasticity | 1. elastic demand 2. inelastic demand 3. perfectly inelastic demand 4.perfectly elastic demand 5. unitarily elastic |
| TYPES OF DEMAND: elastic demand | ~ % change in quantity demand > % change in price ~ Price elasticity of demand ( Ped) = > 1 ~ small change in price, make a greater change in demand ~ brg yg jrg dibeli |
| TYPES OF DEMAND: inelastic demand | ~ % change in quantity demand < % change in price ~ price elasticity of demand = < 1 ~ even ade perubahan hrga , quantity demand tk lari sgt ~ brg yg diperlukan cth: minyak |
| TYPES OF DEMAND: perfectly inelastic demand | ~ quantity demanded does not respond to the price ~ Ped = 0 ~ cth: even harga naik pon, org ttp beli 5 barang ~ cth: insulin. even harga die mngkat , org ttp kne beli 5 sbb dr sruh beli 5 utk pesakit. |
| TYPE OF DEMAND: perfectly elastic demand | ~ small change cause infinite change in quantity demand ~ Ped = infinity ~ GAMBA |
| TYPES OF DEMAND: unitarily elastic | ~ % change in demand = % change in price ~ Ped = 1 ~ GAMBA |
| what is total revenue ( jumlah pendapatan) | ~ amount of money produce by producer ~ same as total expenditure paid by consumer the total market value of good transacted * cth kita jual RM 15, so org beli RM 15 bagi dkt kita |
| How to calculate total revenue | |
| Explain about total revenue | |
| ~ Bila elastic ( brg tu org tk slalu beli) so bile hrga naik org tggu dlu, so pndapatan tuan kedai dpt brkurg..so total revenue decrease ~ bile inelastic ( brg tu org perlukn/ slalu beli) so bile hrga naik org ttp kena beli, so pndptn tuan kedai dpt tgii...so total revenue increase | |
| ELASTICITY OF DEMAND & TOTAL REVENUE: inelastic demand | ~ price increase, quantity decrease ~ gain TR > loss TR ~ total revenue GAMBA and etc |
| ELASTICITY OF DEMAND & TOTAL REVENUE: elastic demand | ~ when price increase, quantity decrease ~ gain TR < loss TR ~ total revenue decrease GAMBA |
| CHANGE IN TOTAL REVENUE : 1. shift in supply curve | ~ shift to the right = TR increase ~ shift to the left = TR decrease GAMBA |
| CHANGE IN TOTAL REVENUE: 2. excess supply | ~ when product supplied is excess, price need to be push down to increase the demand project ~after decline in price : TR gain > TR loss ~ total revenue |
| CHANGE IN TOTAL REVENUE: 3. shift in demand curve | ~ Shift to the right = TR increase ~ shift to the left = TR decrease |
| CHANGE IN TOTAL REVENUE : 4. case of disequilibrium: fixed quantity translocated | ~ due to some external/ internal factor, only fixed quantity product can be supply to market ~ excess demand for that market in market ~ TR fluctuate ~ cth: limited luxury |
| CHANGE IN TOTAL REVENUE: 5. case of disequilibrium: excess supply w/h fixed price | ~ due to some ext/int factor, the product have fixed price ~producer produce more than demand ~ excess supply occur ~ |
| what is Factors affecting the elasticity of demand | |
| FACTOR AFFECT ELASTICITY DEMAND: 1. availability of substitute ( brg yg kita bole gnti dgn product asal tpi ade fx yg sme) | ~ demand for commoity w/h large number of subst. will be more elastic ~ bc small rise in its price will induce these buyer to buy its subst. ~ cth : belaja online. ( tablet & laptop). klu macam harga tablet mingkt, they will buy laptop ( subst ) |
| Factors affecting the elasticity of demand 2. nature of commodities ( sifat barangan) | ~when the thing is necessity ( grain, vege & etc) demand is inelastic ~ demand not change much ~ when commodity is a comfort ( fan/tv) demand is generally elastic |
| Factors affecting the elasticity of demand 3. habit | ~ commodities that become habitual necessities, have less elastic demand ~ they continue to buy even price is increase |
| Factors affecting the elasticity of demand 4. time period | ~ long time = elastic =bc dpt ubah cust. punye preference. ~ short time = inelastic |
| Factors affecting the elasticity of demand 5. share in total expenditure | ~ higher/ greater in total expenditure = elastic demand ~ smaller/ lower total expenditure = inelastic demand |
| Factors affecting the elasticity of demand 6. postponement of consumption | ~ things that is not urgent, is highly elastic as they can postpone in case price is increase cth: biscuit, soft drink |
| Factors affecting the elasticity of demand 7. number of uses | ~ increase uses = elastic ~ decrease uses = inelastic |
| Factors affecting the elasticity of demand 8. income level | ~ higher income = inelastic * even harga mngkat org kaya mampu beli so perubhn tk bsr, thus inelastic ~ less income = elastic |
| Factors affecting the elasticity of demand 9. level of price | ~ cost increase = elastic cth: tv, laptop |
| what are important of elasticity of demand | ~ help firm estimate potential change in demand due to change in :- 1. price of good 2. effect of change in prices of other good 3. other important market factor ~ guide firm to more optimal competitive behavior ~ can be used to predict total revenue change from price change |
| what are importance of elasticity of demand in management | 1. in determination of output level - for making profitable production 2. in determination of price 3.in the determination of govern. policies 4. helpful in adopting the policy of protection |
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