1. Use appropriate diagrams and relevant examples to illustrate and explain your understanding of Elasticity. In your essay, you are expected to address the following issues: a) Definition of price elasticity of demand and explanation of the expected sign. b) Measurement of elasticity. c) The range and the diagrams related to the values of elasticity. d) Definition of income elasticity of demand and explanation of the expected sign. e) Explanation and discussion regarding normal and inferior goods. ((((1500 words Maximum)))) Guidance 1. All the content in the essay needs to be typed and in house style: • Acceptable similarity rate: up to 20%. (((( I want the similarity between 9% and 16%, I do not want 0% similarity)))))) • Font: Times New Roman • Font size: 12 • Line spacing:1.5 • Margin: normal margin • All pages should be numbered (((Mark needed between 90% and 95%))) ((Marking criteria)) Introduction Mentioned background and stated clear objectives of essay. Body (10 marks) (50 marks) Organised into paragraphs with each paragraph linked in a meaningful way to those that precede and follow it. Appropriate diagrams have been used in relevance to the topic discussed wherever applicable. Analysis, integration and logical interpretation of the information provided. Conclusion (10 marks ) Reminded what the essay is meant to do. Provided an answer to the title and reminded on how the answer has been reached. Reference list 12 Refrences 4 Books 4 journals 4 websites All 100% Academic (10 Marks) List of references used in the essay have been provided in Harvard APA format with in-text citations reflected in main body. Overall structure
Elasticity
Elasticity
Introduction:
Economists use elasticity to measure consumer responsiveness to changes in the various determinants associated with demand. Elasticity addresses percentage changes i.e. a percentage change in quantity demanded divided by a percentage change in (own price, the price of another good, or income). Understanding elasticity is important to businesses and policy makers alike as they consider how a potential change will impact markets when consumers adjust their purchasing behaviors.
Tasks:
A. Discuss elasticity of demand as it pertains to elastic, unit, and inelastic demand.
B. Discuss cross price elasticity as it pertains to substitute goods and complementary goods.
C. Discuss income elasticity as it pertains to inferior goods and to normal goods (sometimes also called superior goods).
D. Use an example to discuss why demand tends to be relatively elastic in a situation where “Availability of Substitutes” exists.
E. Discuss the “Proportion of Income Devoted to a Good” concept by contrasting two products typically purchased each month.
1. Address, in your discussion, specific examples of how the same percentage change in the price of both goods affects the percentage change in the quantity demanded for each of the two goods.
F. Contrast how a person would initially respond to a relatively large increase in the price of a product in the short run as opposed to how that same person might react to that same price increase over a longer time horizon (i.e., the long run), using the “Consumer’s Time Horizon” concept.
G. Identify by price range the areas on the demand curve where demand is elastic, inelastic, and unit elastic using the attached “Graphs for Elasticity of Demand, Total Revenue.”
1. Explain the corresponding impact on total revenue for each of the three price ranges indentified in part G.
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Note: When using sources to support ideas and elements in a paper or project, the submission MUST include APA formatted in-text citations with a corresponding reference list for any direct quotes or paraphrasing. It is not necessary to list sources that were consulted if they have not been quoted or paraphrased in the text of the paper or project.
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