Showing posts with label Elasticity. Show all posts
Showing posts with label Elasticity. Show all posts
Multiple Choice answers
163 (a)
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165 (b)
166 (a)
167 (b)
168 (a)
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170 (c)
171 (c)
172 (c)
173 (b)
174 (c)
175 (d)
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177 (b)
178 (d)
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180 (c)
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182 (b)
183 (a)
184 (d)
185 (b)
186 (d)
Suffering from brain fog?
I first noticed it on the school run. Every day, a teacher would be stationed outside the classroom door to shepherd the children into the arms of their waiting parents. But one day, as I was about to exchange our usual greeting, my face reddened. I couldn’t remember the teacher’s name.
So it came as no surprise to read the results of a new study, last month, that said women’s brains start going downhill in their 50s - a decade earlier than previously thought. The academics from the University of California found that, on average, the female mind loses up to five per cent of its sharpness between 50 and 60.
Their study, published in journal Plos One, followed more than 2,000 healthy women, aged in their 40s, for 10 years. It found that verbal memory declined by, on average, one per cent every five years, and cognitive processing - including speed of perception and reaction - declined by one per cent every two years.
Business rates
Everyone seems to have a solution for fixing the high street, but nobody’s buying. Fifteen independent shops a day are lost and this genuinely pains me. Ever since I got my first Fisher-Price cash register, I’ve had a thing about bricks-and-mortar shops. The first true pangs of jealousy I ever felt were seeing a photo of my older cousin helping out in my great aunt’s hardware shop in Plymouth. Why wasn’t I being afforded that opportunity?
As soon as I could, I began working in retail. It’s a bug that has never entirely left me. When, a couple of years ago, my husband and I opened a gallery-craft shop in a pretty harbour town in Devon, it was like the fulfilment of a dream. For those who don’t understand the appeal: when you have your own shop you get to do a bit of everything – branding, stock control, marketing and, in our case, representing the local producers and craftspeople who made our stock.
You also learn much about human nature and patience. When one in three visitors announces: “Well, this is something a bit different”, you could happily throw a lamp base at them. But, instead, you just radiate goodwill. It feels a complete and constructive vocation. For a time, you even fool yourself that you can earn a living.
New cars
The number of new cars that hit British roads surged to a 12-year high in January, particularly boosted by vehicles not fuelled by diesel or petrol.
According to the Society of Motor Manufacturers and Traders, 174,564 new cars registered on British roads last month, a 2.9 per cent increase on the same month last year and the highest number since 2005.
Healthy Eating
Almond milk, e-cigarettes and avocados enjoyed the biggest surge in demand among UK shoppers last year, as a trend toward healthy eating gathered pace, according to one research firm.
Figures from data provider IRI, which specialises in helping retailers to understand consumer demand, £62m was spent on almond milk in 2016, a 32 per cent increase on the previous year.
Sales of e-cigarettes rose by 30.1 per cent to £81m and sales of avocado added 28.3 per cent to a whopping £187m.
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Figures from data provider IRI, which specialises in helping retailers to understand consumer demand, £62m was spent on almond milk in 2016, a 32 per cent increase on the previous year.
Sales of e-cigarettes rose by 30.1 per cent to £81m and sales of avocado added 28.3 per cent to a whopping £187m.
Read more
A weaker pound would help
Britain can re-industrialise and
restore manufacturing jobs around the country - if the pound can be
pushed down to a substantially weaker level, according to John Mills,
the boss of retail group JML.
Mr Mills, a major donor to the Labour party and prominent Leave campaigner in the EU referendum, believes that the UK can become a competitive manufacturing centre if sterling falls to $1.05 for a sustained period of time.
The pound fell from $1.48 just before the EU referendum to $1.25 currently, but further falls could help the UK reach a tipping point at which the country can compete even with the likes of China, he said
Mr Mills, a major donor to the Labour party and prominent Leave campaigner in the EU referendum, believes that the UK can become a competitive manufacturing centre if sterling falls to $1.05 for a sustained period of time.
The pound fell from $1.48 just before the EU referendum to $1.25 currently, but further falls could help the UK reach a tipping point at which the country can compete even with the likes of China, he said
“If the exchange rate came down to $1.05 it would become more
economical to site manufacturing in the UK rather than shipping goods in
from China,” he said.
“We’d need to get the exchange rate to that level to make it worth producing the vast range of goods you see in the shops.”
He noted that other rich countries including Germany and Japan have far larger manufacturing sectors than the UK, and blames, in part, a rise in the exchange rate from the 1970s and through the 1980s for making life tougher for British exporters.
A weaker pound would push up the cost of imported goods, hitting households in the pocket. But he argued that an improvement in jobs and wages across much of the country would work to offset much of this harm over time if the economy was revitalised by greater industrial investment.
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“We’d need to get the exchange rate to that level to make it worth producing the vast range of goods you see in the shops.”
He noted that other rich countries including Germany and Japan have far larger manufacturing sectors than the UK, and blames, in part, a rise in the exchange rate from the 1970s and through the 1980s for making life tougher for British exporters.
A weaker pound would push up the cost of imported goods, hitting households in the pocket. But he argued that an improvement in jobs and wages across much of the country would work to offset much of this harm over time if the economy was revitalised by greater industrial investment.
Read more
A weaker pound....
Britain can
re-industrialise and restore manufacturing jobs around the country - if
the pound can be pushed down to a substantially weaker level, according
to John Mills, the boss of retail group JML.
Mr Mills, a major donor to the Labour party and prominent Leave campaigner in the EU referendum, believes that the UK can become a competitive manufacturing centre if sterling falls to $1.05 for a sustained period of time.
The pound fell from $1.48 just before the EU referendum to $1.25 currently, but further falls could help the UK reach a tipping point at which the country can compete even with the likes of China, he said.
Read more...
Mr Mills, a major donor to the Labour party and prominent Leave campaigner in the EU referendum, believes that the UK can become a competitive manufacturing centre if sterling falls to $1.05 for a sustained period of time.
The pound fell from $1.48 just before the EU referendum to $1.25 currently, but further falls could help the UK reach a tipping point at which the country can compete even with the likes of China, he said.
Read more...
Marmite
The Unilever
boss has defended the multinational’s decision to raise the price of
Marmite, saying many other suppliers have followed suit with price rises
or by reducing the size of products in response to the weakening pound.
Tesco, Britain’s biggest retailer, removed Marmite and other household brands made by Unilever from its website last October, after the manufacturer tried to raise its prices by about 10% owing to sterling’s slump after the Brexit vote.
Tesco and Unilever resolved their dispute, but the price of Marmite has been sharply increased in UK supermarkets.
Paul Polman, chief executive of Unilever, said the decision to raise prices was “definitely the right one” given that sterling fell against the dollar by up to 20% last year.
He said Unilever, which also makes household brands such Flora margarine, Magnum ice-cream and Dove soap, had to balance “value for money” for shoppers with “long-term” factors.
Polman added: “That is true for us and true for others, otherwise you end up being unsustainable.”
The Unilever boss said that since the company increased prices many other items – including own-brand supermarket products – had risen in price or shrunk in size, a process known as “shrinkflation”.
Polman was speaking as Unilever reported revenues had fallen by 1% to €52.7bn (£44.9bn) in 2016.
Read more
Tesco, Britain’s biggest retailer, removed Marmite and other household brands made by Unilever from its website last October, after the manufacturer tried to raise its prices by about 10% owing to sterling’s slump after the Brexit vote.
Tesco and Unilever resolved their dispute, but the price of Marmite has been sharply increased in UK supermarkets.
Paul Polman, chief executive of Unilever, said the decision to raise prices was “definitely the right one” given that sterling fell against the dollar by up to 20% last year.
He said Unilever, which also makes household brands such Flora margarine, Magnum ice-cream and Dove soap, had to balance “value for money” for shoppers with “long-term” factors.
Polman added: “That is true for us and true for others, otherwise you end up being unsustainable.”
The Unilever boss said that since the company increased prices many other items – including own-brand supermarket products – had risen in price or shrunk in size, a process known as “shrinkflation”.
Polman was speaking as Unilever reported revenues had fallen by 1% to €52.7bn (£44.9bn) in 2016.
Read more
U-turn
BMW and its Mini offshoot have caved in to demands to let dealers put their cars on a price comparison site.
The U-turn comes as the competition regulator was threatening an inquiry.The pressure is being seen as a clear signal to firms that they must not stop the public taking advantage of the power of the internet to find bargains.
BMW had put a ban on its dealers using Carwow, which connects car sellers across the country with buyers hunting for the best price.
The website appealed to the UK's Competition and Markets Authority (CMA), accusing BMW of putting a road block in the way of legal competition.
'Time is right'
Carwow argued that dealers with cars at competitive prices were clamouring to be given permission to use the site and speed up their sales.After months of wrangling, BMW reversed its original decision, as it became clear that the CMA was on the brink of launching a formal investigation.
Car sales - new and old - are moving increasingly online, with other websites, such as Webuyanycar, Tootle and Wizzle, also making inroads.
James Hind, Carwow's founder, said: "It shows this is a consumer trend which is not going to abate."
He believes 90% of car buyers do their research online, though even Carwow's users then complete their purchase direct with the dealer.
The CMA has made no secret of its enthusiasm for promoting the potential of price comparison sites to strengthen the hand of consumers.
A spokesman for BMW said: "The time is now right to enable our UK retailers to explore the additional sales opportunities that are becoming available through internet-based new car portals.
"Over the coming months we will be working with our retailers and learning from their experience to ensure we continue to provide a consistent premium buying experience for those customers who choose to purchase a BMW or Mini product through these new channels."
Read more...
What can elasticity of demand be used for?
Elasticity of demand (and for that
purpose, even elasticity of supply) plays an indispensable role in
economic decisions of the community. This is because whether an economic
decision is beneficial or not to the decision-maker unit depends, to a
large extent, upon the elasticity of demand of the good concerned. As a
result, all economic decisions (by the government, business firms,
investors, and consumers, etc.) take into account the elasticity of
demand of the relevant good. This fact is elaborated below with the help
of some leading areas in which elasticity of demand is used.
1. The Government:
The concept of elasticity demand is of
great use to the government in formulating its revenue-collecting and
welfare policies. The government needs resources for financing its own
activities and for providing several goods and services, which are
collectively needed by the society. It raises most of its finance
through taxation and supplements it, where the need be, by borrowings.
However, while levying and collecting
taxes, the government has to keep in mind the response of the market.
For example, basic necessities of life have a very low elasticity of
demand and the government, by taxing them, can collect a large amount of
tax revenue without reducing their demand by the consumers. However,
while taxing such goods, it has also to think of the fact that this may
lead to an undue burden upon the consumers. They may reduce their
consumption of some other (non-taxed or taxed at lower rates) goods
which happen to be health giving and nutritious, such as milk, cereals
and vegetables. However, if the good in question is considered a harmful
one and has an elastic demand, then the government can deliberately
levy a huge tax on it with the objective of reducing its consumption.
2. Business Sector:
It may be assumed that a business firm
pursues the objective of profit maximization. Its profit is the excess
of its revenue receipts over its total cost. The former, in turn, is
determined by the product of per unit price of the good (Px) and the
quantity of its demand (Dx).
When a firm changes Px, its total
revenue changes both on account of the change in Px and the resultant
change in Dx. Therefore, a firm finds that while determining the price
of its product, it should take into account its elasticity of demand as
well. This point may be further elaborated by noting that elasticity of
demand itself differs from one market structure to another.
Thus in perfect competition, the firm is
a price taker. Its product has perfect elasticity of demand, and it
cannot increase its price.
Business firms also realize that they
can charge higher prices with a limited reduction in demand only in the
short run. If faced with persistent high price, the consumers shift
their demand to lower priced substitutes in the long run,
3. Input Prices:
Distribution of national income between
individual members and households of the society is an important matter
for the economists and social thinkers. It is commonly believed that it
has an important role to play in the total welfare of the society. In a
modern economy, the income of a household is determined by two factors,
namely,
(i) The productive resources supplied by it to the market
(ii) The rates at which they are paid
for. And the latter, in turn, depends, to a large extent, upon the
respective elasticities of demand for the productive resources.
4. Rate of Exchange and Balance of Payments:
Elasticity of Demand .also plays a
central role in determining a country's rate of exchange and its balance
of payments. Rate of exchange is determined by the demand for and
supply of domestic currency in the international markets. And these
factors are intimately connected with the exports and imports of the
country in which elasticities play a central role. If a country's export
goods have a high elasticity of demand in international markets, it
finds it easier to increase its exports by reducing their prices. In
this case, it can improve its balance of trade without unduly weakening
its rate of exchange. But it will be risky for it to raise the export
prices if its exports have a low elasticity of demand in the
international markets.
Quick numerical test
XED = +0.2
XED = -23
PED = -90
YED = -10
PES = + 20
YED = +4
XED = 0
PED = 0
PES = 0
PES = 0.3
YED = 0
YED = +0.5
PED = 1
Uses of elasticity of demand
The Price Elasticity of Demand
In economics, the demand for a certain good or service is represented by the demand curve. The demand curve is plotted on a graph with price labeled on the y-axis and quantity labeled on the x-axis. The resulting curve is downward-sloping; thus, increases in price result in a fall in demand for a given product. Just the amount by which demand falls with an increase in price is measured by the price elasticity of demand; the price elasticity of demand is measured by the percentage change in quantity demanded divided by the percentage change in price. So, if price increases by 10 percent, and demand falls by -0.5 percent, the price elasticity of demand would be -0.5. However, by convention, price elasticity is expressed as a positive number. The elasticity would thus be expressed as 0.5, not -0.5.Analyzing the Price Elasticity of Demand
After calculating the price elasticity of demand, one of five results may be obtained. An elasticity equal to one is said to be unit elastic; that is, any change in price is matched by a change in quantity demanded. An elasticity of between zero and one is said to be relatively inelastic, when large changes in price cause small changes in demand. An elasticity equal to zero is said to be perfectly inelastic, when a change in price does not change the quantity demanded. A relatively elastic good is where elasticity lies between one and infinity, and a small change in price results in a relatively large change in demand. The last category is that of a perfectly elastic good, when a minute change of price results in an infinitely large change in demand.Applying the Price Elasticity of Demand
The price elasticity of demand for a certain good or service has considerable implications for businesses. If an ice cream shop, for example, were to increase the price of vanilla ice cream by 10 percent, and if demand fell by 5 percent as a result, management would then know that the price elasticity of demand for that particular good was elastic. But if they also increased the price of their top-selling flavor, chocolate, by the same amount, and if prices remained the same, then they would have a relatively inelastic product. Thus, elasticities differ with respect to variety of product in question. Businesses must therefore make pricing decisions based on these elasticity assumptions.Impact on Business Management Problems
Price elasticity of demand affects a business's ability to increase the price of a product. Elastic goods are more sensitive to increases in price, while inelastic goods are less sensitive. Assuming that there are no costs in producing the product, businesses would simply increase the price of a product until demand falls. Things become more complicated, however, after introducing costs. Let's say that the cost of vanilla flavoring increases as a result of short market supply. As profits equal revenue minus costs, this would lower the ice cream shop's profits. If costs were close to the price of vanilla ice cream, profits would be almost zero. As vanilla ice cream is elastic, the shop manager would be unable to increase the price without damaging demand. Some businesses, therefore, sell some goods that have little to no profit margin. Their main profits come from products in higher demand. In this case, the ice cream shop would increase the price of the more inelastic good, chocolate ice cream, in order to compensate for the loss in profits.
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