|
DEFAULT RISK: The probability that a borrowing agent will not pay in full the agreed interest and/or principal. A default risk can be assigned to any bond or loan agreement. Of course, there are some instruments considered default-risk-free, that is, instruments for which the probability that a borrowing agent will not pay is zero. The most noted examples are the U.S. Treasury securities, which have virtually no default risk because the U.S. government guarantees that all the principal and interest will be repaid. When calculating the risk premium on financial instruments, investors use default-risk-free instruments for comparison.
Visit the GLOSS*arama
|
|

|
|
                           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, 2000-2025. [Accessed: July 2, 2025]. Check Out These Related Terms... | | | | | | | | | | | | | | Or For A Little Background... | | | | | | | | And For Further Study... | | | | | | |
Search Again?
Back to the WEB*pedia
|


|
|
GREEN LOGIGUIN [What's This?]
Today, you are likely to spend a great deal of time driving to a factory outlet trying to buy either clothing for your kitty cats or a set of luggage without wheels. Be on the lookout for neighborhood pets, especially belligerent parrots. Your Complete Scope
This isn't me! What am I?
|
|
Lombard Street is London's equivalent of New York's Wall Street.
|
|
"always remember an epitaph which is in the cemetery at Tombstone, Arizona. It says: „Here lies Jack Williams. He done his damnedest.¾ I think that is the greatest epitaph a man can have ‚ When he gives everything that is in him to do the job he has before him. That is all you can ask of him and that is what I have tried to do. " -- Harry Truman, 33rd US president
|
|
NSE Nagoya Stock Exchange (Japan)
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|

|