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DIVISIBILITY: One of four characteristics that enables an asset to better function as money. The other three are durability, transportablity, and non-counterfeitability. This characteristic means that the item used as money can be easily divided into small increments so that it can match commodity values more precisely.

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Lesson 11: Elasticity Basics | Unit 3: Measurement Page: 13 of 25

Topic: Doing The Numbers: Endpoint <=PAGE BACK | PAGE NEXT=>

  • Our task is to calculated the price elasticity of demand using the endpoint formula. I am presenting the endpoint formula for reference.

    endpoint
    elasticity
    =(Q2 - Q1)
    Q1
    ÷(P2 - P1)
    P1

  • Suppose the values for this formula are P1 = $2.49, Q1 = 5,447 unit of a given good (say Tacos), P2 = $1.99, Q2 = 6,608 units of Tacos

    endpoint
    elasticity
    =0.21 ÷ - 0.20=- 1.05

  • This value - 1.05 indicates that the a one percent decline in the price of Tacos results in a 1.05 percent increase in quantity demanded.


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MARGINAL COST CURVE

A curve that graphically represents the relation between the marginal cost incurred by a firm in the short-run product of a good or service and the quantity of output produced. This curve is constructed to capture the relation between marginal cost and the level of output, holding other variables like technology and resource prices constant. Three related curves are average total cost curve, average variable cost curve, and average fixed cost curve.

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Today, you are likely to spend a great deal of time searching for rummage sales wanting to buy either a coffee table shaped like the state of Florida or storage boxes for your summer clothes. Be on the lookout for mail order catalogs with hidden messages.
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