Essay plan: Evaluate the Usefulness and Significance of PED
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Course
Elasticity
Institution
OCR
It contains analysis and evaluation points for evaluation of the usefulness and significance of PED. These are points which aren’t found in any OCR textbooks. These points are all valid and largely provide a different array of points than those found in textbooks.
Evaluate
the usefulness PEO
and significance of
Analysis (PEU is
useful) Evaluation CPE0 isn't useful)
① Total Revenue -
will be
informative
to
firms & Estimates -
PEO could be estimated
to be
about how
buyers the
of
good are
livery to incorrect due to data collection
respond a
to
change in pure. Ifthe produce knows being
data
incorrect. As a result the
if
they
that will be Sensetic to is unreliable it lead to back
a DP,
may
they may
be hesistant raise decisions.
to
prices as this would I revere
pricing
② Tax- If firms ②
recieve
higher takes
Only Valid for small
price Changes
-
and
they costs
know their pro, can pass there
they
PFO becomes unreliable for
higher Consumes
onto HP will as a
large price changes
lead celess then to
proportional charge in
8 be outdeved! PEO dutch
⑩O which will lead to an increase in TR.
be
May
outdated and date as the
may
up
not to
③ Sales Discount PEP is it demand of
Consumers Change over time.
useful as
-
whether sales disconts will threfore if outdated to rules
suggests
be effective. If PEO is inelastic then
they
this could also lead
use
to
poor pricing
they
shock't
do subs discounts decisions
& Price discrimination firms can
change different & Cateris Paritus hold?
not
may
-
prices different
to consumer Firms will need to
groups. Eng Students consider of
have a more elastic
supply factors when
changing the
price suc
as
of
cost productors and consumer
⑤ Substitutes -
If PEP is elastic and
prices are incomes which could also
affect revenue
hight consumes
the are more
likely to switch
to a
leaper Substitute
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