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Ekonomija: teorija i praksa
2019, vol. 12, iss. 1, pp. 28-40
article language: Serbian
document type: Review Paper
doi:10.5937/etp1901028I

Creative Commons License 4.0
Models of quantitative analysis of elasticity
aUniversity of Business Academy in Novi Sad, Faculty of economics and engineering management
bUniverzitet odbrane, Beograd

e-mail: ceca@fimek.edu.rs, milan.mih83@gmail.com, drimilojevic@gmail.com

Abstract

This paper describes models of price elasticity using quantitative indicators. By observing the interdependence between the elasticity of the demand for some goods and the total consumption expenditure for this commodity, which can be equated with the total income of producers who place those goods on the market, the elasticity can be expressed as a function. Accordingly, the elasticities of prices and demand have been calculated and analyzed for different product categories. The obtained results indicate that the higher the price of these goods, the higher the costs of customers, and thus the higher the sales revenue. On the other hand, the lower the price - the lower the expenses of customers, and therefore the lower the income of sellers. The elasticity of total costs in relation to the supply of goods was also analyzed and it has been shown that the coefficients of elasticity for average and total costs differ from one another by one.

Keywords

References

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