Major determinant of Cross-elasticity of Demand

Major determinant of Cross-elasticity of Demand When it comes to Cross-elasticity of demand, we must first illustrate the concept of elasticity of demand. We can say that elasticity of demand is the foundation of the theory of cross-elasticity of demand because elasticity of demand is related to only one good while cross-elasticity of demand is about the relation of 2 goods. We should first compare the elasticity of demand with the cross-elasticity of demand. Introduction of Elasticity of Demand Elasticity of demand is often referred to as the own-price elasticity of demand for a certain good, such as the elasticity of demand with respect to the price of a good. Elastic demand reflects that consumers are very price sensitive. This concept is understandable because we all know price is one of important determinant of quantity, and the quantity demanded of a good is negatively related to its price. We can suppose: for a seller, lower price promotes sales; for a buyer, higher price constraints their desire of purchase. Take the example from the textbook, suppose that a 10% increase in the price of an ice-cream cone causes the amount of ice cream you buy to fall by 20%. According to the formula We calculate your elasticity of demand as 20%/10%= 2. This result can be explained as the elasticity 2 reflects the change in the quantity demanded is twice as large as the change in the price in proportion. This result owes to reasons as follows: First, market for ice cream is very competitive instead of monopolistic. Second, consumers have choices of other substitutes such as other desserts. Third, when the price of ice cream rises, consumers can buy cakes, milk-shake or other desserts. The above formula usually yields a negative value, because of the inverse nature of the relationship between price and quantity demanded. They are described by the law of demand (Gillespie, Andrew (2007). p.43.) but economists tend to refer to price elasticity of demand as a positive value (i.e., in absolute value terms). Definition of Cross-elasticity of Demand Based on the theory mentioned above about price elasticity of demand, we can go further to find out the relation of two goods. In order to distinguish it from the elasticity of demand for that good with respect to the change in the price of some other good, i.e., a complementary or substitute good. (Png, Ivan (1999). p.57.) The latter type of elasticity measure is called a cross-price elasticity of demand. In microeconomics, cross-elasticity of demand is also called cross-price elasticity of demand, which measures the responsiveness of the demand for a good when there is a change in the price of another good. According to its definition, it is measured as the change in demand in percentage for the good A that occurs in response to a change in price in percentage of the good B. The formula to calculate cross-elasticity of demand is as follows: Major Determinant The cross-price elasticity of demand is often used to see how sensitive the demand for a good is to a price change of another good. The major determinant of cross-elasticity of demand is the closeness of the substitute or complement. A high positive cross-price elasticity indicates that if the price of a certain good goes up, the demand for the other good goes up as well. A negative one tells us the opposite that an increase in the price of one good causes a decrease in the demand for the other good. A small value (either negative or positive) tells us that there is little or no relation between the two goods. They are listed in the table below: Cross-price Elasticity Indication Example Graph A positive cross-price elasticity If the price of one good goes up, the demand for the other good goes up as well. Pork and chicken, etc. A negative cross-price elasticity An increase in the price of one good causes a drop in the demand for the other good. Bicycles and helmets; Petroleum and cars, etc. A small value There is little relation between the two goods. Things have little or no relation at all For example, if we suppose the price of chicken goes up by 20%, and as a result the quantity demanded of pork increases by 10%, at the premise that there is no change in the price of pork or anything else that would have influence on the demand for pork (such as quality, advertising, location, etc). Then the cross-elasticity of demand for pork, with respect to the price of chicken, is 10%/20% = 0.5. This concept is also easy to understand. Firstly, as we know that for two goods that complement each other show a negative cross elasticity of demand, which means that an increase in the price of one good cuts the demand for the other. For instance, if the price of bicycles goes up, we will expect to see a decline in the demand for bike helmets; if the price of petroleum goes down, the demand for car will be expected to rise. In this sort of case, we can say the goods are complements and they have a close link in price and demand. Secondly, on the contrary, two goods that are substitutes have a positive cross elasticity, it means that an increase in the price of one good will therefore increase the demand for the other good. When we observe a positive cross-elasticity, we can assume that the two goods are substitutes, as with chicken and pork, butter and margarine. The Third circumstance is two independent goods. If two goods are independent, undoubtedly they have a zero cross elasticity of demand. Practical Application For firms and corporations, it is necessary for them to know the cross-elasticity of demand for their products when they consider the effect on the demand for their products of a change facing with the challenging price of a rivals product or a complementary product. If the quality and appearance is almost the same (regardless of the factors of affection location, and loyalty, etc.) but the price of Firm A is higher than that of Firm B, most consumers will choose the products of Firms B. Among theories of marketing, pricing is not only difficult but technical. These are vital pieces of information for firms when making their production and strategic plans. However, for goods those complement each other, a firm is supposed to promote the sales of both the products and their complements. Nowadays, the price of petroleum is constantly high and it will continuously get higher in the near future. This is definitely a disaster for automotive industry. Some of the automobile companies adopt the strategy of reduction but gets an unsatisfactory feedback. What affects the decision of a consumer is mainly the price of petroleum instead of the automobile, so some companies think out of a promotional tactic: buy car get petro discounted (though the price of a car may be very expensive), and this may be to some extent cater to the consumers psychology. Another application of the concept of cross-elasticity of demand is in the field of international trade as well as the balance of payments around the world. Whats more, for different industries and fields, the concept of cross-elasticity of demand can be used to measure the closeness of relation of each other. For those monopoly enterprises, they are the unique suppliers in market and they are powerful enough to control the whole market, so they wont suffer the pressure from others. However, for some industries, such as Ministry of Railway, if it decides to raise the price in a large scale, many passengers will prefer other transportation, which will make aviation industry or highroad industry prosperous. This will undoubtedly lay itself in an unadvantageous position.

Virgin :: Renaissance Writing Essays Virginity

Virgin Virgin: Not yet touched, handled, or employed for any purpose; still undisturbed or unused; perfectly fresh or new (Oxford English Dictionary online, definition 16b). For the Renaissance writers, virginity was a precious ideal and a favorite theme. It went by many names: virtue, chastity, purity, maidenhead; but it signified that rare thing that was untouched, fresh, new. In a large sense, it was everything that the Old World of Europe ached and searched for: a new thing, the New World. Virginity was a thing men wanted to admire and treasure, but also to conquer and consume. And to the bearer, the virgin, it was an invaluable asset. Virginity is bounty, riches, and treasure. When European explorers first set foot on the ‘virgin soil’ of the Americas, they were awestruck by the profusion of life, resources, and beauty. This land, innocent of the European touch, "†¦ had many goodly woods full of deer, coneys, hares, and fowl, even in the midst of summer in incredible abundance (Barlow 1067)." The plowing of earth is often compared to the ‘tilling and sewing’ of a virgin woman. Sir Walter Raleigh (1064) explicitly employs this sexual metaphor when he writes "†¦ Guiana is a country that hath yet her maidenhead, never sacked, turned, nor wrought; the face of the earth hath not been torn †¦" Virginity is so admired that the word ‘virtue’ is a synonym for it. But in large part, it is prized only because of the difficulty of overcoming it. The deflowering of a girl or a new-found land is an exciting challenge to be surmounted. Raleigh goads his Queen to take the challenge of colonizing Guiana when he writes of her: "For whatsoever prince shall possess it shall be greatest, †¦ shall hereby hear the name of a virgin which is †¦ able to †¦ invade and conquer so great empires so far removed (1066)." While virginity retained leaves the suitor unsatisfied, it does likewise to the virgin. This mutual yearning and frustration seems to drive Renaissance writers to new heights of poetic expression. For example, Stella reassures Astrophil that, while she must make him wait, she too burns with passion: "Trust me while I thee deny, In myself the smart I try, †¦ (Sidney 993)" In Shakespeare’s first sonnet, he laments that his would-be lover, by denying him, is "Making a famine where abundance lies, Thyself thy foe, to thy sweet self too cruel (1169).

A contemplation Upon flowers by Henry King and Once Upon A Time by Gabriel Okara

In the poems â€Å"Once upon a Time† by Gabriel Okara and â€Å"A Contemplation Upon Flowers† by Henry King, both speakers yearn for transformation and spiritual renewal of their minds. In the poem â€Å"A Contemplation Upon Flowers† by Henry King the speaker reflects on his character. He compares the life of flowers to human life and how these flowers accept death with open arms, unlike him who fears it. He wishes to be brave like these flowers in the face of death. He also admires the humility of these flowers and wishes to have that quality in him.He years for spiritual transformation because he does not want to spend the rest of his life fearing death but to live it to the fullest. In the poem â€Å"Once Upon A Time† by Gabriel Okara, the speaker also years for spiritual transformation. The speaker, who seems to be a father, compares his life as an innocent child to the complications he now faces as an adult and realizes that he is no longer happy with his life. He years for this spiritual transformation because he wants to learn from his son and no longer be fake and to also have back his old life where everything was done with a good heart.King makes great use of personification to make us have a fair understanding of the poem. An example of this device is â€Å"Brave flowers that I could gallant it like you, and be as little vain. † He uses the word ‘gallant’ to describe the bravery of these flowers and how they are not cowards in the face of death and the phrase ‘little vain’ to show these flowers are humble and gracious and he deeply admires these qualities and years to have them in himself.Okara also makes great use of poetic devices. An example is a simile, â€Å"Most of all, I want to relearn how to laugh, for my laugh in the mirror shows only my teeth like a snake’s bare fangs. † This tells us that he knows he is fake just like his friends and does not want to be like this. He years for transformation for this reason because he does not want to be hypocritical anymore and wants to laugh with love and meaning to regain his quality of sincerity.The idea of spiritual transformation was used well in this poem. In both poems , the poets looks at the human conditions, specifically at man’s weakness and they both yearn for change in themselves to become better persons. I personally sympathize with both speakers in these poems because I too have my own weaknesses and fears that I too want to be transformed so that I can get over these and live my life happy and innocent, even when I become an adult.

Redfern Riot Shouldnt Be Prosecuted - 805 Words

Editorial: Redfern riot shouldn’t be prosecuted THE POLICE criticism toward residents of a small inner-city Sydney suburb of Waterloo must signal the end of society and media depictions that has created an inability to deem the residents’ constant claim of police harassment and violence. It is time we should accept the grim fact that many existing attitudes towards the most disadvantaged people, Indigenous Australians, are part of this mayhem-like problem. The public intensely curved its attention toward what happened in NSW on February 15. A 17-year-old Indigenous boy, Thomas Hickey – the most common being â€Å"TJ† – died in hospital, a day after injuring himself whilst chased by the police. This was enough to trigger the community to†¦show more content†¦They, indeed, got arrested. The court prevented them from attending the funeral on February 24. It is essentially – if all allegations are correct – no necessity of prosecution toward this people, as we all know; they were taking decisive action on the prospect of protracted conflict. One must realize, whether or not the allegations are true, and so yet there is no evidence they are not, there is no excuse that Indigenous had points of defence. A point of being neglect: Why do they have to feel neglected in their motherland? And a point of suffering: Why should they suffer in Australia – a birthplace of their ancestors? Until these questions are precisely challenged, Australian should still believe the grim fact that many existing attitude toward most disadvantaged people are the main roots of the problem. A fact that if you asked any non-indigenous Australian about the worth of Indigenous, they will tell straight to your face: they do not have knowledge, they have no contribution to this land; for example in an army – they do not defend Australia. Some of these manipulations might be true, but, lets me take you back to history when first European boat arrived at the west coast of Australia; Aborigines stop them from getting on to the land. But, thei r human nature of feeling the pain of what will happen later in decades – even millennia – didn’t depart, they refuse to let them in. So,