Economics Department
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Economics Department |
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Elasticity essays
This week's essay
1) A company which owns a chain of shops hiring out pre-recorded films on video has estimated that the elasticities of demand for the product are as follows:
(i) The PED is -0.8 (ii) The YED is +2.0 (iii) The XED with respect to the price of tickets to the cinema is +1.5
(a) Explain carefully what is meant by each of these figures (10 marks) (b) Assuming the estimates are correct, discuss the implications for company policy (10 marks)
Other essays
2) (a) Using examples, explain clearly the three concepts of elasticity of demand (10 marks) (b) Use each of the concepts in turn to illustrate circumstances which could cause a fall in the sales revenue of each firm (10 marks)
3) (a) Why would you expect the price elasticity of supply of fish fingers to differ from that of fresh fish (10 marks) (b) Discuss whether price elasticity of supply is likely to be greater in the short run or the long run. (10 marks)
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