3.) Elasticity Price elasticity of demand is the responsiveness of quantity demanded to price changes. The price elasticity of demand has two functions: it measures the responsiveness of demand to a change in price; and, it informs the firm whether an increase in price will increase or decrease its total revenue. Governments and courts use elasticity to measure the responsiveness of demand to price changes. Firms use elasticity to decide the price of their products or whether to add new product models. First, briefly explain the three basic attributes of the elasticity formula. In doing so, be certain your answer includes an illustration of the formula for calculating price elasticity of demand as well as a definition for the perfectly elastic demand curve, perfectly in elastic demand curve and the unit elastic; Next, briefly explain effect of price elasticity of demand on total expenditure and its effect on total revenue; Then, briefly list the determinants of demand elasticity; and Lastly, briefly explain how price elasticity of demand was used to measure a recent economic activity. In doing so, be certain to provide in your answer one example of a contemporary microeconomic issue that illustrates this condition.
3.) Elasticity
First, briefly explain the three basic attributes of the elasticity formula. In doing so, be certain your answer includes an illustration of the formula for calculating price elasticity of demand as well as a definition for the perfectly elastic demand curve, perfectly in elastic demand curve and the unit elastic;
Next, briefly explain effect of price elasticity of demand on total expenditure and its effect on total revenue;
Then, briefly list the determinants of demand elasticity; and
Lastly, briefly explain how price elasticity of demand was used to measure a recent economic activity. In doing so, be certain to provide in your answer one example of a contemporary
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