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• Elasticity Of Supply
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Oil prices - CFTC investigation
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The report stated that as a result of the
imbalance and low price elasticity, very
large price increases occurred as the
market attempted to balance scarce price
elasticity of supply|supply against growing
price elasticity of demand|demand,
particularly in the last three years
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Energy economics
* Elasticity
(economics)|Elasticity of
supply and demand in
energy market
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Taxation - Tax incidence
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If the elasticity of supply is low, more of the tax
will be paid by the supplier
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Taxation - Deadweight costs of taxation
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The tax burden and the amount of
deadweight cost is dependent on the
elasticity (economics)|elasticity of
supply and demand for the good
taxed.
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Taxation - Optimal tax
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Because deadweight costs are related to
the elasticity (economics)|elasticity of
supply and demand for a good, it follows
that putting the highest tax rates on the
goods for which there is most inelastic
supply and demand will result in the least
overall deadweight costs
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Demand - Is the demand curve for PC firm really flat?
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where PEDm is the market elasticity of
demand, PES is the elasticity of supply of
each of the other firms, and (n -1) is the
number of other firms.Perloff (2008) p.
245–246 This formula suggests two
things. The demand curve is not
perfectly elastic and if there are a large
number of firms in the industry the
elasticity of demand for any individual
firm will be extremely high and the
demand curve facing the firm will be
nearly flat.Perloff (2008) p. 244.
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Demand - Is the demand curve for PC firm really flat?
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For example assume that there are 80
firms in the industry and that the demand
elasticity for industry is -1.0 and the price
elasticity of supply is 3. Then
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Tax - Deadweight costs of taxation
The tax burden and the amount of
deadweight cost is dependent on the
elasticity (economics)|elasticity of supply
and demand for the good taxed.
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Microeconomic theory - Measurement of elasticities
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Frequently used elasticities include price
elasticity of demand, price elasticity of
supply, income elasticity of demand,
elasticity of substitution between factors of
production and elasticity of intertemporal
substitution.
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Monopsony - Wage discrimination
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Just like a monopolist, a monopsonistic
employer may find that its profits are
maximized if it discriminates prices. In this
case this means paying different wages to
different groups of workers even if their
MRP is the same, with lower wages paid
to the workers who have a lower elasticity
of supply of their labor to the firm.
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Elasticity (economics)
A major study of the price elasticity of
supply and the price elasticity of demand
for US products was undertaken by
Hendrik S. Houthakker and Lester D.
Taylor.Hendrik S. Houthakker, Lester D.
Taylor (1970).
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Elasticity (economics) - Elasticities of supply
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; Price elasticity of supply
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Elasticity (economics) - Elasticities of supply
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: The price elasticity of supply measures
how the amount of a good that a supplier
wishes to supply changes in response to
a change in price.Perloff, J. (2008). p.36.
In a manner analogous to the price
elasticity of demand, it captures the
extent of movement along the supply
curve. If the price elasticity of supply is
zero the supply of a good supplied is
inelastic and the quantity supplied is
fixed.
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Real estate economics - Supply of housing
The long-run price
elasticity of supply is
quite high
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Economic theory - Supply and demand
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These distinctions translate to differences
in the Price elasticity of supply|elasticity
(responsiveness) of the supply curve in
the short and long runs and corresponding
differences in the price-quantity change
from a shift on the supply or demand side
of the market.
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Oil price increases since 2003 - Possible mitigations
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A higher price should Price elasticity of
supply|stimulate producers to produce
more, and Price elasticity of
demand|consumers to consume less,
while possibly shifting to substitute
good|substitutes
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Tax burden
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The key concept is that the tax incidence
or tax burden does not depend on where
the revenue is collected, but on the price
elasticity of demand and price elasticity of
supply
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Tax burden - Example of tax incidence
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Where the tax incidence falls depends (in
the short run) on the price elasticity of
demand and price elasticity of supply
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Tax burden - Other practical results
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* If consumers drive the same number of
miles regardless of gas prices, then a tax
on gasoline will be paid for by
consumers and not oil companies (this is
assuming that the price elasticity of
supply of oil is high, which is incorrect.
In this case both the price elasticity of
demand and supply are very low). Who
actually bears the economic burden of
the tax is not affected by whether
government collects the tax at the pump
or directly from oil companies.
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Price elasticity - Effect on tax incidence
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PEDs, in combination with price elasticity
of supply (PES), can be used to assess
where the incidence (or burden) of a perunit tax is falling or to predict where it will
fall if the tax is imposed
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Price elasticity of supply
'Price elasticity of supply' ('PES' or
'Es') is a measure used in economics
to show the responsiveness, or
elasticity, of the quantity supplied of a
good or service to a change in its
price.
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Laffer curve - Justifications
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The relationship between tax rate and tax
revenue is likely to vary from one economy
to another and depends on the elasticity of
supply for labor and various other factors
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Income elasticity of demand
In economics, 'income Elasticity
(economics)|elasticity of Supply and
demand|demand' measures the
responsiveness of the demand for a good to
a change in the income of the people
demanding the good, ceteris paribus. It is
calculated as the ratio of the percentage
change in demand to the percentage change
in income. For example, if, in response to a
10% increase in income, the demand for a
good increased by 20%, the income elasticity
of demand would be 20%/10% = 2.
1
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Price of petroleum - CFTC investigation
1
The report stated that as a result of the
imbalance and low price elasticity,
very large price increases occurred as
the Market (economics)|market
attempted to balance scarce price
elasticity of supply|supply against
growing price elasticity of
demand|demand, particularly in the
last three years
https://store.theartofservice.com/the-elasticity-of-supply-toolkit.html
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