What role does the law of demand play in economic analysis? If the campus police force...

 

Transcribed Image Text:

What role does the law of demand play in economic analysis? If the campus police force is expanded and officers are instructed to increase the number of parking tickets they give out, why might the initial effect of this policy increase revenues from fines more than the long-run effect? What does your answer have to do with the elasticity of demand for illegal parking? Many computer programs - for example, operating systems and word processors - are said to be "network goods." Software piracy is often relatively easy because of the digital nature of software. Should software developers oppose all piracy? Consider two markets, one in which the market "tips" and another in which it does not. Compare the incentives of firms in the two markets to lower their prices initially before the market tips. Why would any firm ever pay consumers to take their products? Can you think of examples of such a pricing strategy? What role does the law of demand play in economic analysis? If the campus police force is expanded and officers are instructed to increase the number of parking tickets they give out, why might the initial effect of this policy increase revenues from fines more than the long-run effect? What does your answer have to do with the elasticity of demand for illegal parking? Many computer programs - for example, operating systems and word processors - are said to be "network goods." Software piracy is often relatively easy because of the digital nature of software. Should software developers oppose all piracy? Consider two markets, one in which the market "tips" and another in which it does not. Compare the incentives of firms in the two markets to lower their prices initially before the market tips. Why would any firm ever pay consumers to take their products? Can you think of examples of such a pricing strategy?

Answer rating: 100% (QA)

The law of demand is a fundamental principle in economics that states that all else being equal the quantity demanded of a good or service decreases as its price increases and vice versa This law play... View the full answer