Cross Price Elasticity of Demand

Cross-Price Elasticity of Demand A change in the price of one good can shift the quantity demanded for another good. If the two goods are complements, like bread and peanut butter, then a drop in the price of one good will lead to an increase in the quantity demanded of the other good. However, if… Continue reading Cross Price Elasticity of Demand

Published

Changes in Income and Prices

How Changes in Income and Prices Affect Consumption Choices By the end of this section, you will be able to: • Explain how income, prices, and preferences affect consumer choices • Contrast the substitution effect and the income effect • Utilize concepts of demand to analyze consumer choices • Apply utility-maximizing choices to governments and… Continue reading Changes in Income and Prices

Published

 Discussion on Netflix On Demand Media

 Netflix On-Demand Media Netflix, Inc. is an American provider of on-demand Internet streaming media to many countries around the world, including the United States, and of flat rate DVD-by-mail in the United States. (Credit: modification of work by Traci Lawson/Flickr Creative Commons) That Will Be How Much? Imagine going to your favorite coffee shop and… Continue reading  Discussion on Netflix On Demand Media

Published

Elasticity and Tax Incidence Essay

Elasticity and Tax Incidence The example of cigarette taxes demonstrated that because demand is inelastic, taxes are not effective at reducing the equilibrium quantity of smoking, and they mainly pass along to consumers in the form of higher prices. The analysis, or manner, of how a tax burden is divided between consumers and producers is… Continue reading Elasticity and Tax Incidence Essay

Published