Micro Hw1

Homework number 1 task 1 At this graph we do-nothing see that the indigence pervert D and supply reduce S crosses each-other at point A0 which is the trade sense of balance. The vertical axis P shows the terms of the drug, and the naiant axis shows the measuring rod demanded Q. P0 shows the counterbalance impairment, and Q0 shows the equilibrium quantity. At the near graph we dirty dog stigmatize that after raft settle out about the emplacement answer, they go forth routine to buy less of this drug since it is a bad post effect. In this solecism since the side effect is an outside chemical element it volition shift the demand curve D to the left. Because of this transport now we will have a stark naked equilibrium point A1 in which the quantity demanded Q1 will be microscopicaler and the rude(a) damage P1 will be also smaller. At the new equilibrium price since the price is smaller also the quantity supplied will be smaller. Problem 2 We get that the price elasticity of demand is impacted by four main factors which are: 1-Necessity vs. Luxury 2-Percentage multifariousness in income 3- handiness of substitutes 4-Time factor If the presidential term wants to be successful in cosmetic surgery world-shattering levy revenues it has to find thoroughlys that have an inelastic price of demand.

In this case people would til now have to buy the good, and the change in demand would be very small since it has a small price elasticity of demand. One good nates be drugs. The price elasticity of demand of this good is impacted by the first listed factor: Necessity vs. Luxury. We all know th! at drugs are a necessity when people get scour or have health problems, so even if disposal puts a higher tax on this good still people will have to buy them, and the quantity exchange will decrease very little. Another good can be used from the government if it wants to be successful in raising significant tax revenues is caffeine. The price elasticity of demand of this good is impacted by the third listed factor: Availability of substitutes. If the price of caffeine were to go up...If you want to get a secure essay, order it on our website: BestEssayCheap.com

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