Chapter 3
Quantitative Demand Analys
, Learning Objectives
Apply Apply various elasticities of demand as a quantitative tool to forecast changes in revenues, prices, and/or units sold.
Illustrate Illustrate the relationship between the elasticity of demand and total revenues.
Discuss Discuss three factors that influence whether the demand for a given product is relatively elastic or inelastic.
Explain Explain the relationship between marginal revenue and the own price elasticity of demand.
Show Show how to determine elasticities from linear and log-linear demand functions.
Explain Explain how regression analysis may be used to estimate demand functions and how to interpret and use the output of a regre
© 2022 by McGraw-Hill Education. All Rights Reserved.
, The Elasticity Concept
Elasticity
– A measure of the responsiveness of one variable to changes in another variab
the percentage change in one variable that arises due to a given percentage
change in another variable.
© 2022 by McGraw-Hill Education. All Rights Reserved.
Quantitative Demand Analys
, Learning Objectives
Apply Apply various elasticities of demand as a quantitative tool to forecast changes in revenues, prices, and/or units sold.
Illustrate Illustrate the relationship between the elasticity of demand and total revenues.
Discuss Discuss three factors that influence whether the demand for a given product is relatively elastic or inelastic.
Explain Explain the relationship between marginal revenue and the own price elasticity of demand.
Show Show how to determine elasticities from linear and log-linear demand functions.
Explain Explain how regression analysis may be used to estimate demand functions and how to interpret and use the output of a regre
© 2022 by McGraw-Hill Education. All Rights Reserved.
, The Elasticity Concept
Elasticity
– A measure of the responsiveness of one variable to changes in another variab
the percentage change in one variable that arises due to a given percentage
change in another variable.
© 2022 by McGraw-Hill Education. All Rights Reserved.
