Abstract
Demand elasticity is the sensitivity of changes in the number of goods demanded by consumers due to changes in the price of goods. This paper compares the price elasticity of demand with and without memory effect using fractional-order derivatives. This study is designed using the development theory of fractional derivatives for the economic field in determining the price elasticity of demand. The result of numerical simulation using the value of α and p indicated that the price elasticity of demand with memory effect is more accurate than without the memory effect. Furthermore, this study concluded that the price elasticity of demand does not only depend on the latest price (current price) but changes in all prices from a specific time interval. The findings of this study suggest future studies can examine the phenomenon of market equilibrium using fractional-order derivatives.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
