Elasticity Essay Example | Topics and Well Written Essays - 500 words

Flexibility - Essay Example Given an expanding cost for corn, ranchers will move to delivering corn instead of corn substitutes like soybeans. In tending to the effect of an expansion in the interest for corn coming about because of utilizing corn as an elective vitality source, it is helpful to comprehend the determinants of interest. As indicated by Mankiw (2007), the determinants of interest or the factors influencing the amount of the great requested are value, pay, costs of related merchandise, tastes, desires, and number of purchasers. While development in costs speaks to a development along the interest bend, the interest bend shifts leftward or rightward dependent on changes in pay, costs of related products, tastes, desires, and number of purchasers. The determinants of interest or the factors influencing the amount requested of a decent are recognized in Table 1. Table 1. Determinants of Demand Source: Mankiw, 2007, p. 69 When the interest for corn increments when corn is used as an elective vitality source, we can speak to the circumstance as a rightward move in the interest bend. This is appeared in Figure 2 where the correct ward move sought after is spoken to in the development from D2 to D3. Figure 2. Moves in Demand Curve Price of Corn Quantity of Corn Source: Mankiw, 2007, p.