Serbia, electricity price+to+increase+for+60%+by+2014+by+Caroline

//**REMEMBER: DO NOT SUMMARIZE THE ARTICLE!!!**//

=TITLE OF EXTRACT:= Serbia EPS (Electric Power of Serbia) General Manager, electricity price to increase for 60% by 2014 =SOURCE:= http://serbia-times.com/energy/2579-serbia-eps-electric-power-of-serbia-general-manager-electricity-price-to-increase-for-60-by-2014 =DATE EXTRACT WAS WRITTEN:= Monday, 20 February 2012 =DATE CURRENT EVENT WAS WRITTEN:= Wednesday, 7 March 2012 =EXPLANATION OF THE ECONOMIC THEORY RELATED TO THE ARTICLE:=

In Serbia there is an extremely low price for the consumption of electricity, and this needs to be increased over the next 2 years. The price needs to raise due to the over consumption the electricity. This means that there is too much demand for the product compared to the supply and will cause a shortage of the electricity if price is not increased. Electricity is also a very inelastic which is the reason that the % increase in price. There needs to be a high increase in price because the demand curve needs to decrease substantially.

=VOCABULARY TERMS AND DEFINITIONS:=


 * Supply - amount of goods or services producers are willing and able to make at a given price
 * Law of Supply - As the price of a product increases, quantity supplied will also increase; as the price of a product decreases, quantity supplied will also decrease.
 * Demand - amount of goods or services consumers are willing and able to buy at a given price
 * Law of Demand - As price of a product increases, quantity demand decreases; as price of a product decreases, quantity demand increases
 * Inelastic - this is when the supply and demand for a product is unaffected when the price of the product changes.

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