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Price elasticity of demand is a concept that is tested on the Business Environment and Concepts (BEC) exam and it's one that can be rather tricky. The price elasticity of demand is the measure of how sensitive demand is to a change in price. Like many of the concepts on the BEC CPA exam, it is important to know the formula and how to interpret the results. Let's go ahead and look at the two formulas that you may use to calculate price elasticity of demand. …Continue
Remember Pavlov’s dog? Ivan Pavlov, a Russian physiologist who studied classical conditioning, trained a dog to salivate when hearing the sound of a bell. This response came after repeatedly giving the dog food immediately after ringing a bell.
The point I’d like to make today is that we often operate the same way. Certain activities elicit certain responses if we train ourselves…Continue