elasticity of supply
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• Elasticity Of Supply
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Oil prices - CFTC investigation
1 The report stated that as a result of the imbalance and low price
elasticity, very large price increases occurred as the market attempted to
balance scarce price elasticity of supply|supply against growing price
elasticity of demand|demand, particularly in the last three years
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Energy economics
1 * Elasticity (economics)|Elasticity of supply and
demand in energy market
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Taxation - Tax incidence
1 If the elasticity of supply is low, more of the tax will be paid by the supplier
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Taxation - Deadweight costs of taxation
1 The tax burden and the amount of deadweight cost is dependent on the
elasticity (economics)|elasticity of supply and demand for the good
taxed.
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Taxation - Optimal tax
1 Because deadweight costs are related to the elasticity (economics)|elasticity of supply and demand for a
good, it follows that putting the highest tax rates on the goods for
which there is most inelastic supply and demand will result in the least
overall deadweight costs
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Demand - Is the demand curve for PC firm really flat?
1 where PEDm is the market elasticity of demand, PES is the elasticity of supply of each of the other firms, and (n -1) is the
number of other firms.Perloff (2008) p. 245–246 This formula suggests two things. The demand curve is not perfectly elastic and if
there are a large number of firms in the industry the elasticity of demand for any
individual firm will be extremely high and the demand curve facing the firm will be nearly
flat.Perloff (2008) p. 244.
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Demand - Is the demand curve for PC firm really flat?
1 For example assume that there are 80 firms in the industry and that the demand elasticity for industry is -1.0 and the price elasticity of supply is 3.
Then
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Tax - Deadweight costs of taxation
1 The tax burden and the amount of deadweight cost is dependent on the
elasticity (economics)|elasticity of supply and demand for the good
taxed.
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Microeconomic theory - Measurement of elasticities
1 Frequently used elasticities include price elasticity of demand, price
elasticity of supply, income elasticity of demand, elasticity of substitution between factors of production and
elasticity of intertemporal substitution.
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Monopsony - Wage discrimination
1 Just like a monopolist, a monopsonistic employer may find that its profits are maximized if it
discriminates prices. In this case this means paying different wages to
different groups of workers even if their MRP is the same, with lower
wages paid to the workers who have a lower elasticity of supply of their
labor to the firm.https://store.theartofservice.com/the-elasticity-of-supply-toolkit.html
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Elasticity (economics)
1 A major study of the price elasticity of supply and the price elasticity of
demand for US products was undertaken by Hendrik S. Houthakker
and Lester D. Taylor.Hendrik S. Houthakker, Lester D. Taylor (1970).
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Elasticity (economics) - Elasticities of supply
1 ; Price elasticity of supply
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Elasticity (economics) - Elasticities of supply
1 : The price elasticity of supply measures how the amount of a good that a supplier wishes to supply changes in response to a change in price.Perloff, J. (2008). p.36. In
a manner analogous to the price elasticity of demand, it captures the extent of
movement along the supply curve. If the price elasticity of supply is zero the
supply of a good supplied is inelastic and the quantity supplied is fixed.
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Real estate economics - Supply of housing
1 The long-run price elasticity of supply
is quite high
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Economic theory - Supply and demand
1 These distinctions translate to differences in the Price elasticity of supply|elasticity (responsiveness) of
the supply curve in the short and long runs and corresponding
differences in the price-quantity change from a shift on the supply or
demand side of the market.
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Oil price increases since 2003 - Possible mitigations
1 A higher price should Price elasticity of supply|stimulate producers to
produce more, and Price elasticity of demand|consumers to consume less, while possibly shifting to substitute
good|substitutes
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Tax burden
1 The key concept is that the tax incidence or tax burden does not depend on where the revenue is
collected, but on the price elasticity of demand and price elasticity of
supply
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Tax burden - Example of tax incidence
1 Where the tax incidence falls depends (in the short run) on the
price elasticity of demand and price elasticity of supply
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Tax burden - Other practical results
1 * If consumers drive the same number of miles regardless of gas prices, then a tax on gasoline will be paid for by consumers and not oil companies (this is assuming that the price elasticity of supply of oil is high, which
is incorrect. In this case both the price elasticity of demand and supply are very low). Who actually bears the economic
burden of the tax is not affected by whether government collects the tax at the pump or
directly from oil companies.
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Price elasticity - Effect on tax incidence
1 PEDs, in combination with price elasticity of supply (PES), can be
used to assess where the incidence (or burden) of a per-unit tax is falling or to predict where it will fall if the
tax is imposed
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Price elasticity of supply
1 'Price elasticity of supply' ('PES' or 'Es') is a measure used in economics
to show the responsiveness, or elasticity, of the quantity supplied of a good or service to a change in its
price.
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Laffer curve - Justifications
1 The relationship between tax rate and tax revenue is likely to vary from
one economy to another and depends on the elasticity of supply for labor and various other factors
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Income elasticity of demand
1 In economics, 'income Elasticity (economics)|elasticity of Supply and demand|demand' measures the responsiveness of the
demand for a good to a change in the income of the people demanding the good, ceteris
paribus. It is calculated as the ratio of the percentage change in demand to the
percentage change in income. For example, if, in response to a 10% increase in income, the
demand for a good increased by 20%, the income elasticity of demand would be 20%/10%
= 2.https://store.theartofservice.com/the-elasticity-of-supply-toolkit.html
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Price of petroleum - CFTC investigation
1 The report stated that as a result of the imbalance and low price
elasticity, very large price increases occurred as the Market (economics)|market attempted to balance scarce
price elasticity of supply|supply against growing price elasticity of
demand|demand, particularly in the last three years
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