3867443
Description
Mind Map by Sanskriti Jain, updated more than 1 year ago
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Created by Sanskriti Jain
over 8 years ago
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Demand Supply
- Demand Curve
- Downward Sloping
- Substitution Effect - Consume something else
- Income Effect - Real Income falls
- Elasticity
- Determinants of Elasticity - Definition of the Market • Availability of close Substitutes • Proportion
of expenditure • Necessities versus Luxuries • Addictiveness • Time Horizon
- Mid Point method - so that elasticity remains the same
irrespective of direction of movement along supply
surve
- Perfecty Inelastic E = 0
- Highly Inelastic E< 1
- Highly Elastic E>1
- Highly Elastic E>1
- Highly Inelastic E< 1
- Income Elasticity of Demand = ( % change in Quant) /
(% change in Price)
- Cross Elasticity = ( % change in demand of quat A) / (% change in demand of quant B)
- Substitutes - E > 0
- Compliments - E < 0
- Compliments - E < 0
- Substitutes - E > 0
- Determinants of Elasticity - Definition of the Market • Availability of close Substitutes • Proportion
of expenditure • Necessities versus Luxuries • Addictiveness • Time Horizon
- Substitution Effect - Consume something else
- Shifts Caused By- Income, Substitutes available, Preference, Expectations, Number of
Buyers
- Income Rises - D for Normal good rises
- I Rises - D for Inferior good goes down
- I Rises - D for Inferior good goes down
- Related Goods
- Substitutes
- Compliments
- Substitutes
- Income Rises - D for Normal good rises
- Downward Sloping
- Supply Curve
- Upward Sloping
- Shifts Caused by - Input Prices, Technology, Expectations, Number of sellers, Govt policy
- Supply Elasticity = (% Change in Quantity)/ (% Change in Price)
- Supply is more elastic in the long run
- Highly inelastic - Elasticity < 1
- Unit Elastic - Slope = 1
- Highy Elastic - Elasticity > 1
- Highy Elastic - Elasticity > 1
- Unit Elastic - Slope = 1
- Supply is more elastic in the long run
- Upward Sloping
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