Management Accounting Essay

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Management Accounting
Essay
8/8/2018
Student Name

1 | P a g e
Contents
Q1...............................................................................................................................................1
Q2...............................................................................................................................................2
Q3...............................................................................................................................................3
Q4...............................................................................................................................................3
References..................................................................................................................................5

2 | P a g e
Q1.
Perfectly elastic demand can be defined as the degree of responsiveness in the quantity
demanded with respect to the price. Other aspects of the business remains constant only the
pricing will vary. The demand elasticity can be measured by the percentage alterations in the
demanded quantity of a commodity bifurcated by the percentage alterations in the pricing of
the commodity. The perfectly elastic demand has the degree greater than 1 that means that the
commodity has many substitutes available in the market. In the Monopolistic market, little
increase in the pricing will be decrease in demand of the product (Ambrus, Calvano and
Reisinger, 2016).
(Source: Kirzner, 2016)
Perfectly elastic supply can be understood as the degree of responsiveness in the supplied
quantity with respect to the price other things remain constant. The elasticity in price of the
supply can be measured by the percentage alteration in supplied quantity of a commodity
bifurcated by the percentage alterations in the pricing of a commodity (Aghaei and Alizadeh,
2013).