Professional Documents
Culture Documents
AND DEMAND
Sensitivity to Price Changes
2
n If %p > %Q , then TR .
n If %p < %Q , then TR .
Total Revenue
13
The shorter the time frame, the less substitution is possible; the longer
the time frame, the more substitution is possible.
In the short run, demand is less elastic than in the long run.
Governments are often asked to interfere with the outcomes of the law of
supply and demand because they are politically undesirable to some
people.
If wages are seen as being too low, there will be pressure on the
government to regulate the labor market.