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AGGLOMERATION ECONOMIES: A reduction in production cost the results when related firms locate near one another. Firms can be related as competitors in the same industry, by using the same inputs, or through providing output to the same demographic group. The fashion industry, for example, experiences agglomeration economies because they can share specialized inputs (photographers, models) that would be too expensive to employ full time. Retail stores have agglomeration economies when located in shopping malls because they have access to a large group of potential customers with lower advertising cost. Agglomeration economies is given as one of the primary reasons for the emergence of urban areas.
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                           ELASTIC SUPPLY: The general supply relation in which relatively small changes in price cause relatively large changes in quantity supplied. Small changes in price cause relatively large changes in quantity supplied or the percentage change in quantity supplied is larger than the percentage change in price. This characterization of elasticity is most important for the price elasticity of supply. Elastic supply is one of two general elasticity relations for supply. The other is inelastic supply. An elastic supply relation is a very responsive, or stretchable, relation. The elastic relation is most often directed toward supply in terms of the price elasticity of supply. In this context, supply is said to be elastic if the percentage change in quantity is larger than the percentage change in price. This means that sellers are responsive to price changes.An elastic supply relation can fall into one of two categories--perfectly elastic and relatively elastic. - Perfectly Elastic: Perfectly elastic means an infinitesimally small change in price results in an infinitely large change in quantity supplied. This elasticity alternative exists when the price is fixed, that is, an infinite range of quantities is associated with the same price. This is the extreme, limiting case of elastic. Perfectly elastic supply can occur, in theory, when producers are able to switch resources among a large number of perfect substitutes-in-production.
- Relatively Elastic: Relatively elastic means that relatively small changes in price cause relatively large changes in quantity. Quantity is very responsive to price, but not infinitely so. The percentage change in quantity supplied is greater than the percentage change in price. Relatively elastic supply occurs when producers are able to switch resources among a large number of close but not perfect substitutes-in-production.
Recommended Citation:ELASTIC SUPPLY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: July 26, 2024].
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BLACK DISMALAPOD
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Today, you are likely to spend a great deal of time wandering around the shopping mall seeking to buy either decorative picture frames or storage boxes for your income tax returns. Be on the lookout for telephone calls from long-lost relatives.
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The first "Black Friday" on record, a friday marked by a major financial catastrophe, occurred on September 24, 1869 -- A FRIDAY -- when an attempted cornering of the gold market induced a financial crises and economy-wide depression.
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"Old age isn't so bad when you consider the alternative. " -- Cato, Roman orator
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JGB
Japanese Government Bond
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