According to business dictionary, elasticity is a responsive measured in price or quantity. It is also a sensitivity of quantity towards changes of price and it is measured using the elasticity concept with a diagram of demand and supply curve. Why is this important? The importance is to explain the consumer and sellers respective behavior in the market; and also to show the intersection between demand and supply. The general calculation is shown below:
Percentage (%) of change in quantity
Elasticity = Percentage (%) of change in determinant
There are few reasons why elasticity is measured using percentage (%), it’s allows subject measured in different units and also changes in quantity due to change of price in currency value. Problems can be avoided in determining size of unit used. The changes can only be seen if an initial value is provided; for example if the price of the item is RM4 and RM1.20 additional will be significant but if the price is RM48.90 then the RM1.20 is insignificant change. Basically if an initial price is higher and changes are small, then the changes is insignificant, why is this happening? The answer is some consumer can’t really see the different in the price change. There are items that can be elastic and items that can be substitute for example mineral water, chocolate etc. but item that can’t be substitute is petrol, coffee, cigaretteetc.; these are item even the price increase the demand is still the same as everybody that owns a car need petrol, if you are addicted to cigarette, even the price increase you will still buy it.
Elasticity that is normally used is divided to four types which is; price elasticity of demand, price elasticity of supply, income elasticity o...
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... when income starts from RM2,501 and above per annum is within 1– 27%. For non-resident individuals they are taxed at a flat rate of 27%. Where as tax that need to be paid by income of companies is subject to corporate tax at the rate of 25%. Tax for small and medium enterprises (SME) is only calculated from the first RM500,000 with taxed at 20%, and after will be taxed at 25%. For those who carry out petroleum operation is charged at 38%. Sales tax in Malaysia are from 5% to 10%, this mostly apply to those are in food business. For alcoholic and non-alcoholic compound preparations used for making beverages are at 20%. Because taxes return is the most importance one, the government has to make sure that tax payer pays. In order to make sure that people pays tax, government need to show them the importance of them paying and what it can do for the country.
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