Relationship Between Uncompensated Price Elastic

Question: Discuss about the Relationship Between Uncompensated Price Elastic. Answer: Introduction: The term Ceteris Paribus is associated to a Latin phrase, which means "all other things being equal" or "other things held constant". The interpretation made on the economic aspect has been seen in terms of the different types of the description and the formulation of economic outcomes. Hence, the assumption based on the conceptualization of the Ceteris Paribus is able to show the different types of the concepts related to the application of the several other variables while the immediate considerations are held constant (Cartwright 2013). In the given case, process of moving to the new equilibrium output and price is seen with an increase in the price of the beef. It has been further seen that the major factor contributing to the rise in the price of beef to rise in Australia is mainly due to the decrease in the supply of the cattle products. Hence, major factor contributing to the rise in the price of beef to rise in Australia is seen with the price rise, which is being driven by a fall in the number of cattle being turned into beef. As per the given case, it has been further observed Spaghetti bolognaise and T-bone steaks are getting too expensive, pushing Australians towards other types of meat. The application of the concept related to the Ceteris Paribus is seen with the cost of most goods is either static or falling; while the price of beef has risen by more than 16 per cent over the past 12 months. It has been further seen that the different type of the demand of the product has been seen to be constant in nature while the number of cattle sent to the different typed of the local abattoirs was down sharply. It has been seen that while the number of calves processed fell to its lowest level on record. It has not only led to lesser quality of red meat on the shelf and but also led to higher prices (Schurz 2014). It has been further seen that the application of the concept related to the Ceteris Paribus is appropriate in the given case as the price and the quantity demanded of an ordinary good has been seen in form of the ordinary goods. It has been seen that the cost of most goods is either static or falling hence; the diagram clearly shows that the supply has fallen in the last 12 months hence it shifted from S1 to S2. It has further led to fall in quantity from Q1to Q2 and the rise in the price of the moving to the new equilibrium output and price has been seen with rise from P1 to P2 (Nickel 2014). Based on the given case it has been observed that the with the price of beef has risen 16 per cent over the past 12 months it has been seen that Mince has climbed towards $15 a kilogram, and prime barbecue cuts of beef are well over $30/kg. Hence, it can be clearly observed that the the price elasticity of demand for beef in Australian market is elastic in nature. The price elasticity of demand is seen as the responsiveness or in other terms, also known as the elasticity of the quantity demanded for a particular good or service to a change in its price. It can be seen that the due to the lower amount of supply of the beef products the price in the market has gone up. This has clearly shown that the elasticity of the price is high in term of the supply and due to the rise in the relevant price of the products. It can be further seen that there has not been anything stated related to the consumer demand. Hence, it can be seen the price elasticity related to the consumer expenditure is unaffected by the changes in the price of the beef. This is evident because there have been several types of the other items which can act as the substitutes products. The rise in the price of the beef can be seen to compensate by the stagnant prices in case of the chicken. Hence, it can be seen that the consumer expenditure related to the price of the beef is seen to be constant in nature. In order to show the different types of the effect of the changes in the rise in the price related to the supply of the beef items has been shown below with the diagram as follows. It has been further seen that the different types of the changes associated to the rise in the level of the prices related to the coefficient of the price elasticity of demand. Due to the significant amount of changes in the price due to lower supply, the price elasticity has been seen to be lesser than 1 and hence the demand can be elastic in nature in the long run (Sabatelli 2016). The use of supply and demand diagram to explain the impact of the rising price of beef on a related market has been seen to be applicable in the law of demand. According to this law in case of rise in the price of the beef, there can be significant amount of fall on demand of the beef items. It can be further seen that the fall in the price of the other substitutes products such as chicken will lead to overall 9oncreemetn of the demand in case of the other meat products. Hence, as per the law of the demand it can be seen that as the price of the beef products is seen to be going up then there can be a significant amount of decrease in the rise of the beef items. The different types got the associated changes in the rise in the prices of the beef items can be directly related to the fall in the demand of the consumers (Coglianese et al. 2016). It can be further seen that that as the supply is also lower of the amount of the demand will be compensated with the higher amount of the pric es in the beef products. It ca been further observed that the different types of the prices related to the increase in the price from $15 a kilogram to $ 30 a kilogram, can be seen to affecting the market equilibrium. The equilibrating process in the related market in terms of the new equilibrium output and price can be seen with the relevant decreasing the demand of the products. The diagram given below adheres to the law of demand and is able to depict the relevant changes in the demand of the consumers due to the significant rise in the price of the beef products (Flottau and Warwick 2013). As per the given case the decrease in the supply of the beef items is shown with S to S, this has reduced the quantity demanded from Q to Q2. In addition to this, the new equilibrium has been depicted with E to E2 (Wood 2014). Reference List Cartwright, N., 2013. Ceteris paribus laws in practice. Coglianese, J., Davis, L.W., Kilian, L. and Stock, J.H., 2016. Anticipation, tax avoidance, and the price elasticity of gasoline demand.Journal of Applied Econometrics. Flottau, J. and Warwick, G., 2013. Supply and Demand.Aviation Week and Space Technology,175(10). Mankiw, N.G., 2014.Principles of macroeconomics. 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