the percentage change in the cpi can be used to measure inflation.
the percentage change in the cpi can be used to measure inflation.
the percentage change in the cpi can be used to measure?
inflation
the cpi is a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically. sub-indices and sub-sub-indices are computed for different categories and sub-categories of goods and services, being combined to produce the overall index with weights reflecting their shares in the total of the consumer expenditures covered by the index. it is one of several price indices calculated by most national statistical agencies. the annual percentage change in a cpi is used as a measure of inflation. a cpi can be used to index (i.e. adjust for the effect of inflation) the real value of wages, salaries, and pensions; to regulate prices; and to deflate monetary magnitudes to show changes in real values. in most countries, the cpi, along with the population census, is one of the most closely watched national economic statistics.
consumer price index
for inelastic goods, because of the inverse nature of the relationship between price and quantity demanded (i.e., the law of demand), the two effects affect total revenue in opposite directions. but in determining whether to increase or decrease prices, a firm needs to know what the net effect will be. elasticity provides the answer: the percentage change in total revenue is approximately equal to the percentage change in quantity demanded plus the percentage change in price. (one change will be positive, the other negative.) the percentage change in quantity is related to the percentage change in price by elasticity: hence the percentage change in revenue can be calculated by knowing the elasticity and the percentage change in price alone.
price elasticity of demand