Examlex
Suppose the market for grass seed is expressed as:
Demand: QD = 100 - 2p
Supply: QS = 3p
Price elasticity of supply is constant at 1.If the supply curve is changed to Q = 8p,price elasticity of supply is still constant at one.Yet with the new supply curve,consumers pay a larger share of a specific tax.Why?
Elastic Demand
A situation in which the demand for a product or service significantly changes in response to changes in price.
Quantity Demanded
The total amount of a good or service that consumers are willing and able to purchase at a specific price point.
Percentage Increase
A measure of how much a quantity has grown compared to its original number, expressed as a percentage.
Demand Curve
The demand curve is a graphical representation showing the relationship between the quantity of a good consumers are willing to buy and its price.
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