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5

In the case of linear demand $d_i=a_i-x_iP$ (assuming $d_i$ is quantity demanded by individual $i$), the price elasticity of demand at point $(d_i,P)$ is \begin{equation} \epsilon_i(d_i,P)=x_i\cdot \frac{P}{d_i}. \end{equation} As @the_rainbox noted in their answer, price elasticity of demand varies along a linear demand curve. So in order to compare ...


3

No, slope of a demand function is $\frac{\partial q(p)}{\partial p}$ elasticity of demand is $\frac{\partial q(p)}{\partial p} \frac{p}{q(p)}$. So they cannot be same except in some special cases.


2

In economics profit is simply defined as total revenue minus total costs or: $$\Pi = TR-TC$$ In your case if Pfizer makes \$100B in revenue, spends \$80B on business expenses doing so, then spends the remaining \$20B on research for a new drug. from economic perspective the profit would be: $$\Pi= TR -TC = {\\\$}100B - ({\\\$}80B+{\\\$}20B) = 0B$$ So from ...


1

Federal funds rate is a rate at which banks can borrow extra money at an overnight market. This can be viewed as 'banks' cost' since when people want to lend from certain bank, the bank will often get the money not from some new deposits it itself attracts but from the overnight market. Consequently if the Fed funds rate drops they can afford to lend money ...


1

As far as I understand these terms are used almost interchangeably with the former term being more wide while the later applies more specifically to visualization of the term structure. According to Mishkin and Eakins, Financial Markets and Institutions. 8ed, in chapter 5 pp137 on Term Structure of Interest Rates: A plot of the yields on bonds with ...


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