Professional Documents
Culture Documents
Price
a
P1
D
O Q1 Quantity
a
P1
D
O Q2 Q1 Quantity
a
P1
D'
D
O Q2 Q1 Quantity
c
P3 P1
a D'
D
O Q3 Q2 Q1 Quantity
Illustrating TE graphically
Total expenditure
4
P(RM)2
0 5
b a D
10
20
P(RM) 5 4
b a D
10
20
D
0 15 20
8 P(RM)
D
0 15 20
Special cases
PD = 0
P2
P1
Q1
Special cases
PD = 0 PD =
a
P1
b D
Q1
Q2
Special cases
PD = 0 PD = PD = 1
20
b
8
40
100
Special cases
PD = 0 PD = PD = 1
S1
P0
Q0
S1 S2
P0
Q0
S1 S2
P1
P0
Q0
Q1
S1 S2
P1
P0
Q0
Q1
Q2
P1
D1
O Q1 Q
P1
D2 D1
O Q1 Q
Si b
P2
P1
D2 D1
O Q1 Q
Si b c
SS
P2 P3 P1
D2 D1
O Q1 Q3 Q
Si b c
SS
P2 P3 P4 P1
SL d
D2 D1
O Q1 Q3 Q4 Q
Other Elasticities
Income elasticity of demand
measurement determinants
degree of necessity rate at which people are satisfied level of income
applications
P1
D1
O Q1 Q
P1
D2 D1
O Q1 Q
S short-run
b
P2 P1
D2 D1
O Q1 Q2 Q
S short-run
b
P2 P3 P1
S long-run c
D2 D1
O Q1 Q2 Q3 Q
S1
a
P1
Q1
S1 S2 a
P1
Q1
S1 S2 a
P1 P2
D short-run
Q1
Q2
S1 S2 a
P1 P3 P2
c b D long-run D short-run
Q2 Q3
Q1
S1
P1
D1
S1
P1
P2
b D2
D1
S2 S1
P1 P3
a c
P2
b D2 D3
D1
S1
P1
D1
O Q
S1
P2
P1
a D2 D1
S1 S2
P2
P3 P1
c a D2 D1 D3
Q
S1
P1
D1
S1
P1 P2
a b
D1 D2
O Q
S1 S2
P1 P2
a b
P3
c D1 D3 D2
Q
S1
P1
D1
O Q
S1
P2 P1
b a
D1
O
D2
Q
S2 S1
P3
P2 P1
b a D3 D1 D2
Q
Pe
D
O Q
S
minimum price
surplus
Pe
D
O
Qd
Qs
Maximum prices
Maximum prices
justification
Maximum prices
justification effects
Pe
D
O Q
Pe
maximum price
shortage D
Qs
Qd
Maximum prices
justification effects dealing with resulting shortages
Maximum prices
justification effects dealing with resulting shortages rationing
Maximum prices
justification effects dealing with resulting shortages rationing black markets