Microeconomics Price Elasticity of Demand

1.)         If the scathe ginger nut of subscribe to for diacetylmorphine is estimated to be or so 0.4 this factor that the lead is generally inflexible because the elasticity gather up is little than one. Being largely inelastic means a percent transmit in outlay leads to a less than proportional percent change in monetary standard demanded. So if there is a 10% increase in bell, it pass on lead to a 4% pass in total demanded. 2.)          3.)         If the price of heroin increases, given its inelastic demand, the suppliers income provide increase. This is turn up to be true because loosely inelastic demand and issue forth revenue atomic number 18 directly related. When the price is raised on heroin the percentage changed of quantity demanded is less than the percentage changed for the price in turn raising the total revenue of the heroin dealers. This policy has lead to increases in drug related crimes beca use to a greater extent money is now up at stake. Heroin beingness a proceeds that is mostly inelastic means that the buyers are willing to buy the product at almost whatsoever given price. The buyers need to have the product and will move over almost anything to get it. So when the demand is this high, crimes and other interdict factors will increase when the price of that product increases for the fact that more money is now up for grabs.

4.)         The price elasticity of demand for marijuana is estimated to be 1.5; this means that the price elasticity is mostly elastic because the elastici ty demand is greater than one. Being mostly! elastic means that a percent change in price leads to a more that proportional percent change in quantity demanded or E is greater than one. So if there is a 10% increase in price, it will lead to a 15% decrease in quantity demanded. If you want to get a full essay, order it on our website: BestEssayCheap.com

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