What causes an Inelastic demand curve in Economics?
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When the price elasticity of demand for a good is inelastic (Ed < 1), the percentage change in quantity is smaller than that in price. Hence, when the price is raised, the total revenue of producers rises, and vice versa.
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observed phenomenon in economics where the economy experiences booms and slumps. Any force that influences national income would influence the business cycle.\n\nY = C + I + G + NX\n\nNational Income = Consumption + Investment + Government + Net Exports.
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Consumer Products prcies go up due to rise in inflation. Inflation is due to imbalance in demand and supply of factors of productions. Then the factors of production are insufficient to satisfy the demand then the prices starts rising as the functional result of demand law. High demand low supply rises the price. \n\nOn increase in prices all the consumer products are prices high to cover the cost of factor of production.
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Market force is where demand and supply in the market interact to affect prices.
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Marketplace desirability = DEMAND.\n\nthe rise in demand means more people want that service or product.
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If there is demand, there will be supply. They work side by side. One cannot exist without the other. As one increases or decreases, so will the other. Not always at the same rate of increase or decrease. This rule determines cost of production & selling price. On a simple grid, using a X & Y axis; where they cross is the selling price.
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http://en.wikipedia.org/wiki/Law_of_supply_and_demand
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An inflationary gap means that demand has outstripped supply. This typically leads to inflation of prices because there is less supply to meet the demand, if the demand curve for the product in question is inelastic, prices will rise because the supply curve will have shifted to intersetct the demand curve at a higher price point.\n\nOr more simply put, people will be willing to pay more for the product because it's not as easy to come by.
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Cyclical (Demand deficient Unemployment) unemployment: When there is not enough aggregate demand for the labor.\n \nFrictional: When moving from one job to another, the unemployment temporarily experienced when looking for a new job. \n\nStructural: Experienced when the structure of an industry or skill demands changes in mainly: \nswitching from a declining industry to a rapidly growing one. \nPace of change in the tastes of people. \nRegional Structure of industry. \n\nTechnological: Caused by the replacement of workers by machines or other advanced technology. \n\nClassical (Real-wage): When real wage for a job are set above the market-clearing level, commonly government (as with the minimum wage) or unions, although some (such as Murray Rothbard, America's Great Depression p. 45) suggest that even social taboos can prevent wages from falling to the market clearing level. \n\nMarxian: when unemployment is needed to motivate workers to work hard and to keep wages down, to preserve profitability. \n\nSeasonal: When an industry only is in demand certain times. For example, ski slopes, Shopping Mall Santas.
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Quantities:\nIf the price is going to fall the demand QUANTITY will increase & supply QUANTITY will decrease.\n\nCurves:\nIf the price going to fall the curves of demand & supply will not shift because the effective factor is the price, so any change in price will make movement on the curve, but the curve will not shift upward or downward (remeber any effetive factor instead of the price will shift the curves).\n\nEquilibrium:\nThere are many senarios could happen when the price falled that depend on some factors of the good:\n\nElasticity, Price ceiling, Price floor, kind of good if its posible to increase the suuply in the short term (example ship need a long time to be built), because there are 3 kind of periods (market period-day, short period month or week, long period), but the price here will fall, then supply will decrease Consequently we should check if the good could be stored for a long time like cars, or must be sold quickly like foods that will affect quantity of supply decreases.\n\n1- if demand increases > supply decreases that lead to increase in equilibrium quantity < increase in equilirium price. (vicevarse).\n\n2- if demand increase = supply dencrease that lead to no change in equilibrium quantity + increase in equilibrium price.\n\ncheck the factors above wich one related to you question and choose.\n\nPromise me to do your homework if it was again alone & i will help you anytime sister :)\n\nSalaam :))
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Well don't we just have number of highly qualified liberal economists giving you answers!  Is there not one liberal who can actually give an intelligent answer - not just repeating Micheal Moore?  \nHave you ever heard of Economics?  Do you not understand that SUPPLY & DEMAND drive economics?  The high oil prices are pretty easy to understand if are open minded.\nCrude oil prices are set by OPEC (that's ORGANIZATION for PETROLEUM EXPORTING COUNTRIES).  China & India are demanding double the oil they once needed because of their rapidly growing middle classes.  The worldwide demand has gone up and the worldwide supply has not increased.  When you have more demand than supply then the crude oil price will go up.  If we had more supply than demand the price would go down.  It's pretty simple an't it!  OPEC controls part of the prices, refining crude oil is the other cost.  Since we have not built any refineries or explored for oil in the past 30 years because of enviromental wackos - that is contributing to the high gas prices.
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Supply and demand. Since the demand is down, the prices have fallen recently.
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The price of an item is determined mostly by who and how many want to buy it, and how many are able to buy it. (Basic Supply and Demand) By raising minimum wage we make more people able to buy, and more people willing to spend, which in turn raises prices and causes inflation.
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The foreign supply curve is perfectly elastic at the world market place; unlimited quantities can be purchased at the world price. \n\nPerfectly elastic supply - quantity decreases, price to consumers goes up and price to sellers stays the same. The entire burden of the tax is paid by consumers.
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High Supply, Low demand = Lower Price\n\nLow Supply and High demand = High Price\n\nSimple economics.  Our gas prices work this way too.. Very few refineries to refine gas, which causes lower supplies.
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It is a way of controlling inflation.  With low unemployment you have more people competing for goods and services which drives up prices.  Higher unemployment means there is less purchasing dollars out there which tends to stablize or lower prices.
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price elasticity of demand = (dD/dP) * (P/Q)\n\nwhere D = the quantity demanded, P = price, and Q is the quantity.\nP/Q is the price to quantity ratio at whatever point you are trying to calculate elasticity.\n\nSo then price elasticity of demand = (-1800/P^4) * (P/Q)  \n\nwhen p = 25, Q = 600/(25^3) = 0.0384\n\nso price elasticity of demand when P = 25 is:\n(-1800/25^4) * (25/0.0384) = -3