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### A more elementary way to capture the relationship is in the form of a table. The numbers in the table below are what one expects in a demand curve: as price goes up, the amount people are willing to buy decreases. (A widget is an imaginary product that some economist invented when he could not think of a real product to use in an example.)

 A Demand Curve Price of Number of Widgets Widgets People Want to Buy \$1.00 100 \$2.00 90 \$3.00 70 \$4.00 40

### If one of the factors being held constant becomes unstuck, changes, and then is held constant again, the relationship between price and quantity will change. For example, suppose the price of getwids, a substitute for widgets, falls. Then, people who previously were buying widgets will reconsider their choices, and some may decide to switch to getwids. This would be true at all possible prices for widgets. These changes in the way people will behave at each price will change the demand curve to look like the table below.

 A Demand Curve Can Shift Price of Number of Widgets Widgets People Want to Buy \$1.00 [100] becomes 80 \$2.00 [90] becomes 70 \$3.00 [70] becomes 50 \$4.00 [40] becomes 10

### This can be rewritten in the form:

economics , the cross elasticity of demand and cross price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in the price of another good. It is measured as the percentage change in quantity demanded for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the quantity of new cars that are fuel inefficient demanded decreased by 20%, the cross elasticity of demand would be -20%/10% = -2. The formula used to calculate the coefficient cross elasticity of demand is or: In economics , the cross elasticity of demand and cross price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in the price of another good. It is measured as the percentage change in quantity demanded for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the quantity of new cars that are fuel inefficient demanded decreased by 20%, the cross elasticity of demand would be -20%/10% = -2. The formula used to calculate the coefficient cross elasticity of demand is or: " id="pdf-obj-6-2" src="pdf-obj-6-2.jpg">

### The formula used to calculate the coefficient cross elasticity of demand is

economics , the cross elasticity of demand and cross price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in the price of another good. It is measured as the percentage change in quantity demanded for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the quantity of new cars that are fuel inefficient demanded decreased by 20%, the cross elasticity of demand would be -20%/10% = -2. The formula used to calculate the coefficient cross elasticity of demand is or: In economics , the cross elasticity of demand and cross price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in the price of another good. It is measured as the percentage change in quantity demanded for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the quantity of new cars that are fuel inefficient demanded decreased by 20%, the cross elasticity of demand would be -20%/10% = -2. The formula used to calculate the coefficient cross elasticity of demand is or: " id="pdf-obj-6-21" src="pdf-obj-6-21.jpg">

### or:

economics , the cross elasticity of demand and cross price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in the price of another good. It is measured as the percentage change in quantity demanded for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the quantity of new cars that are fuel inefficient demanded decreased by 20%, the cross elasticity of demand would be -20%/10% = -2. The formula used to calculate the coefficient cross elasticity of demand is or: In economics , the cross elasticity of demand and cross price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in the price of another good. It is measured as the percentage change in quantity demanded for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the quantity of new cars that are fuel inefficient demanded decreased by 20%, the cross elasticity of demand would be -20%/10% = -2. The formula used to calculate the coefficient cross elasticity of demand is or: " id="pdf-obj-6-25" src="pdf-obj-6-25.jpg">

### The formula used to calculate the coefficient cross elasticity of demand is

economics , the cross elasticity of demand and cross price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in the price of another good. It is measured as the percentage change in quantity demanded for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the quantity of new cars that are fuel inefficient demanded decreased by 20%, the cross elasticity of demand would be -20%/10% = -2. The formula used to calculate the coefficient cross elasticity of demand is or: In economics , the cross elasticity of demand and cross price elasticity of demand measures the responsiveness of the quantity demanded of a good to a change in the price of another good. It is measured as the percentage change in quantity demanded for the first good that occurs in response to a percentage change in price of the second good. For example, if, in response to a 10% increase in the price of fuel, the quantity of new cars that are fuel inefficient demanded decreased by 20%, the cross elasticity of demand would be -20%/10% = -2. The formula used to calculate the coefficient cross elasticity of demand is or: " id="pdf-obj-6-42" src="pdf-obj-6-42.jpg">

In
the
example
above,
the
two
goods,
fuel

### arc elasticity of x is defined as:

R. G. D. Allen due to the following properties: (1) symmetric with respect to the two prices and two quantities, (2) independent of the units of measurement, and (3) yield a value of unity if the total revenues at two points are equal. Arc elasticity is used when there is not a general function for the relationship of two variables. Therefore, point elasticity may be seen as an estimator of elasticity; this is because point elasticity may be ascertained whenever a function is defined. For comparison, the y point elasticity of x is given by: " id="pdf-obj-8-13" src="pdf-obj-8-13.jpg">

### where the percentage change is calculated relative to the midpoint

R. G. D. Allen due to the following properties: (1) symmetric with respect to the two prices and two quantities, (2) independent of the units of measurement, and (3) yield a value of unity if the total revenues at two points are equal. Arc elasticity is used when there is not a general function for the relationship of two variables. Therefore, point elasticity may be seen as an estimator of elasticity; this is because point elasticity may be ascertained whenever a function is defined. For comparison, the y point elasticity of x is given by: " id="pdf-obj-8-20" src="pdf-obj-8-20.jpg">
R. G. D. Allen due to the following properties: (1) symmetric with respect to the two prices and two quantities, (2) independent of the units of measurement, and (3) yield a value of unity if the total revenues at two points are equal. Arc elasticity is used when there is not a general function for the relationship of two variables. Therefore, point elasticity may be seen as an estimator of elasticity; this is because point elasticity may be ascertained whenever a function is defined. For comparison, the y point elasticity of x is given by: " id="pdf-obj-8-23" src="pdf-obj-8-23.jpg">

### For comparison, the y point elasticity of x is given by:

R. G. D. Allen due to the following properties: (1) symmetric with respect to the two prices and two quantities, (2) independent of the units of measurement, and (3) yield a value of unity if the total revenues at two points are equal. Arc elasticity is used when there is not a general function for the relationship of two variables. Therefore, point elasticity may be seen as an estimator of elasticity; this is because point elasticity may be ascertained whenever a function is defined. For comparison, the y point elasticity of x is given by: " id="pdf-obj-8-43" src="pdf-obj-8-43.jpg">

### y

R. G. D. Allen due to the following properties: (1) symmetric with respect to the two prices and two quantities, (2) independent of the units of measurement, and (3) yield a value of unity if the total revenues at two points are equal. Arc elasticity is used when there is not a general function for the relationship of two variables. Therefore, point elasticity may be seen as an estimator of elasticity; this is because point elasticity may be ascertained whenever a function is defined. For comparison, the y point elasticity of x is given by: suppl y Total amount of a product (good or service ) available for purchase at any specified price . It is determined by: (1) Price: producers will try to obtain the highest possible price whereas the buyers will try to pay the lowest possible price—both settling at the equilibrium price where supply equals demand . (2) Cost of inputs : lower the input price the higher the profit at a price level and more product will be offered at that price. (3) Price of other goods : lower prices of competing goods will reduce the price and " id="pdf-obj-8-49" src="pdf-obj-8-49.jpg">

### Determinants of supply:-

1.Prices of different goods including substitutes

• 2. Number of suppliers

• 3. Production function and technology

• 4. Prices of different inputs including wage rates, interest

• 5. Producers' future expectations

if more producers enter a market, the supply will increase, shifting the supply curve to the right.

Resource Prices

the prices that a producer must pay for its resources (inputs) influence supply. Resource prices affect the cost of production. As resource prices increase, the cost of production increases. As a result, producers must receive higher prices to be willing to produce any given level of output.

Technological Changes

changes in technology usually result in improved productivity. Increased productivity can reduce the cost of production. A decrease in the cost of production will increase supply.

prices of Other Products of the Firm

if a firm produces more than one product, a change in the price of one product can change the supply of another product. For example, automobile manufacturers can produce both small and large cars. If the price of small cars rises, the producers will produce more small cars. This draws the resources of the plant into the production of small cars and away from the production of large cars. Therefore, the supply of large cars will decrease.

producer Expectations

changes in producers' expectations about the future can cause a change in the current supply of products. For example, if producers of peanuts were to anticipate a price rise in the future, they may prefer to store their peanuts and sell them later. As a result, the current supply of peanuts would decrease.

### law of supply

The relationship between the quantity sellers want to sell during some time period (quantity supplied) and price is what economists call the supply curve. Though usually the relationship is positive, so that when price increases so does quantity supplied, there are exceptions. Hence there is no law of supply that parallels the law of demand.

The supply curve can be expressed mathematically in functional form as Qs = f(price, other factors held constant). It can also be illustrated in the form of a table or a graph.

 A Supply Curve Price of Number of Widgets Widgets Sellers Want to Sell \$1.00 10 \$2.00 40 \$3.00 70 \$4.00 140

The graph shown below has a positive slope, which is the slope one normally expects from a supply curve

law of demand . The supply curve can be expressed mathematically in functional form as Qs = f(price, other factors held constant). It can also be illustrated in the form of a table or a graph. A Supply Curve Price of Number of Widgets Widgets Sellers Want to Sell \$1.00 10 \$2.00 40 \$3.00 70 \$4.00 140 The graph shown below has a positive slope, which is the slope one normally expects from a supply curve " id="pdf-obj-10-56" src="pdf-obj-10-56.jpg">

If one of the factors that is held constant changes, the relationship between price and quantity, (supply) will change. If the price of an input falls, for example, the supply relationship may change, as in the following table.

 A Supply Curve Can Shift Price of Number of Widgets Widgets Sellers Want to Sell \$1.00 [10] becomes 20 \$2.00 [40] becomes 60 \$3.00 [70] becomes 100 \$4.00 [140] becomes 180

The same changes can be shown with a graph that shows the supply curve shifting to the right. Notice each price has a larger quantity associated with it.