karen millen: (Walter Wessels, 34, Prentice Hall)Inferior goods:These goods do not follow the law of demand and their demand declines even when the prices of a good remains constant, these are goods whose demand declines as the income of consumers increase in the economy,hermes bag on sale, as the income of consumers increase they demand more expensive goods and therefore the demand of that good declines even if its price is reduced. (Edward Nevin, 133, McGraw Hill press)Demand price elasticityDemand price elasticity refers to the change in quantity demanded. (Edward Nevin,
133, McGraw Hill press)Supply price elasticitySupply price elasticity refers to the change in quantity supplied. (Edward Nevin, 133, McGraw Hill press)Markets:There are four main types of markets that differ in their characteristics, they include perfect competition, oligopoly, monopoly and monopolistic competition, (McConnell and Brue, 128, McGraw Hill press) the following is a discussion of these markets:Perfect competition:Perfect competitive markets are markets where we have many buyers and sellers and the price in the market is determined by demand and supply forces, in this case therefore the firms are price takes, (Edward Nevin, 161, McGraw Hill press)The following are the characteristics of a perfect competitive marke (Edward Nevin, 133, McGraw Hill press)The demand price elasticity is determined by dividing the change in quantity demand by the change price, a value less than one means that the demand curve is inelastic while a value greater than one means that the demand curves is elastic.(Walter Wessels, 34, Prentice Hall)Giffen goods:These are goods whose demand increases as their prices increases, these are luxurious goods and as their price increases consumers demand more, the reason for this increase is due to the fact that consumers feel that the high price depicts high quality and also status.(Walter Wessels, 34, Prentice Hall)Price Elasticity:Elasticity refers to the change in quantity demanded or supplied due to changes in the price of a good.This law applies to normal goods and there are other goods that do not obey this law and they include giffen and inferior goods. (Edward Nevin, 133, McGraw Hill press)The supply price elasticity is determined by dividing the change in quantity supplied by the change price, a value less than one means that the supply curve is inelastic while a value greater than one mean that the supply curves is elastic.
