Assignment (Economics) Example | Topics and Well Written Essays - 500 words

(Economics) - Assignment ExampleThe entreat for eggs will be dead because it is a necessity (food item). For instance, it also takes a low portion of income. The demand for DVD rentals would be relatively inelastic for a consumer who has high inclination for movies, dramas, shows, music etc. Also, it takes very low portion of income as the rentals are lour than acquisition costs. The demand would be elastic for a customer with no interest in music or entertainment. Answer 3 If a sign seeks to raise total revenue, then it must consider the impact of three major factors such as scathe, substitutes and time on consumers. For instance, the necessities (food, clothing, shoes, automobiles, utilities, communication, transport, internet etc.) have inelastic demand therefore, a price increase will lead to an increase in total revenue. However, the luxuries (air travel, perfumes, expensive brands etc.) have highly elastic demand therefore, the price increase will lead more than proportion al decrease in demand and revenue decreases. Next, if a product has greater availability of substitutes in foodstuff then price increase of a product will lead to increase in demand of substitute.