Do you want BuboFlash to help you learning these things? Or do you want to add or correct something? Click here to log in or create user.



5.3. How the Consumer Responds to Changes in Price
#4-3-the-investment-opportunity-set #cfa #cfa-level-1 #economics #has-images #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-5-consumer-equilibrium #study-session-4

We now hold income and the price of one good (wine) constant but decrease the price of the other good (bread). Recall that a decrease in the price of bread pivots the budget constraint outward along the horizontal axis but leaves the vertical intercept unchanged—as in Exhibit 14 , where we examine two responses to the decrease in the price of bread.

In both cases, when the price of bread falls, the consumer buys more bread. But in the first case, he is quite responsive to the price change, responding with an elastic demand for bread. In the second case, the consumer is still responsive but much less so than the first consumer; this consumer’s response to the price change is inelastic.
If you want to change selection, open original toplevel document below and click on "Move attachment"


Summary

statusnot read reprioritisations
last reprioritisation on suggested re-reading day
started reading on finished reading on

Details



Discussion

Do you want to join discussion? Click here to log in or create user.