Price elasticity of demand

Price elasticity of demand

Bachelor of Business Studies (BBS) — First Year

Subject: Microeconomics for Business (MGT 207)

Unit 3: Elasticity of Demand and Supply

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

• Explain the scope and key elements of price elasticity of demand.
• Explain the economic reasoning and use appropriate diagrams or relationships in business analysis.

Curriculum Scope

• Meaning and degrees
• Percentage/proportionate and average calculation methods
• Point price elasticity
• Relationship to total expenditure

Detailed Microsyllabus

1. Price elasticity foundations

   1. Responsiveness of quantity demanded to own price.
   2. Elastic, inelastic, unit-elastic and limiting cases.
   3. Distinguish elasticity from the slope of a curve.

2. Measurement

   1. Percentage and average or arc methods.
   2. Point elasticity along a demand relationship.
   3. Total-expenditure method and its interpretation.

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Curriculum reference: Tribhuvan University, Faculty of Management, BBS curriculum with first-year syllabus, PDF pages 17-19.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit lecture hours apply to the whole unit; no separate topic hours or marks are assigned here. The programme subject list identifies this course as MGT 207; the detailed subject heading in the source prints MGT 203.