When I think of economics, the first things that pop up in my mind is supply and solicit. Everything that has to do with economics is pendent on how high or low the customers demand is and transgression versa; how high or low the supply from the producers are. For this reason, my essay will concentrate on variant scenarios with costumers demand and producers supply for different goods. The law of demand states that when the price of a good move (rises), the quantity demanded rises (falls), ceteris paribus. Also, the law of supply says that the higher (lower) the price of the good, the greater (smaller) the quantity supplied. We atomic number 50 also involve price ginger snap of demand and supply. The price pliantizedity is defined as a measure of the responsiveness of quantity demanded to a change in price and price elasticity of supply is the measure of the sensibility of the quantity supplied to changes in price of a good. In other words, elasticity of demand measures the responsiveness of quantity demanded to a change in price and elasticity of supply measures the responsiveness of quantity supplied when the price changes. In my essay, I will take in different elasticity categories for demand to our modern market of goods.
Firstly, a good example for when elasticity of demand is perfectly elastic is milk, almost everyone know what milk should cost, so if a corporation tries to sell a milk product more big-ticket(prenominal) than other companies, consumers would not buy it, because they are only spontaneous to pay a certain price for milk. One of the reasons for wherefore I consider milk as perfectly elastic is that there are plenty of milk producing companies out on the market, so if one of them tries to charge a higher price, consumers can easily find a substitute for that milk that is little expensive. Hence, milk companies are extremely responsive for the quantity demanded for their products.
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