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प्रश्न
Explain any two factors that affect the price elasticity of demand. Give suitable examples.
Mention two factors affecting the price elasticity of demand.
उत्तर
Factors affecting the price elasticity of demand are:
- Availability of substitutes: The price of a good falls in relation to its substitute. Consumers can easily switch from one good to another even if there is only a small change in price and so its demand will increase. Hence the price elasticity of demand for commodities having close substitutes is relatively high.
- Nature of good: A good can be necessary, comfort or luxury good as per the preferences of the consumers. The demand for necessary good does not fluctuate with the price as these goods are basic for day-to-day life. Hence it is inelastic. The demand for comfort and luxury goods are elastic as the consumption of these goods can be postponed.
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संबंधित प्रश्न
A 5 percent fall in the price of a good raises its demand from 300 units to 318 units. Calculate its price elasticity of demand.
Explain the effect of the following on the price elasticity of demand of a commodity:
(i) Number of substitutes
(ii) Nature of the commodity
Match the following :
| Group 'A' | Group 'B' |
| (a) Demand and price | (1) wages |
| (b) Perfectly elastic supply | (2) Vertical supply curve |
| (c) Land | (3) Transfer income |
| (d) Unemployment allowance | (4) Horizontal supply curve |
| (e) Reserve Bank of India | (5) Inverse relation |
| (6) Rent | |
| (7) 1935 | |
| (8) Direct relation |
State whether the following statement is true or false :
Concept of ‘elasticity of demand’ is useful for the finance minister.
Write Short note on the following.
Ratio method of measuring price elasticity of demand ?
Define or explain the following concepts (Any THREE):
Stock
Choose the correct answer :
Perfectly elastic demand curve is _________.
Choose the correct answer :
Demand of labour is _______
Choose the correct answer :
The account in which the specific amount is deposited per month regularly is known as _________.
Match the following:
|
Group A
|
Group B
|
|
1. Cars and petrol
|
a. Elastic demand
|
|
2. Point method
|
b. Complementary
|
|
3. Necessary goods
|
c. Geometric method
|
|
|
d. Inelastic demand
|
State whether demand will be Elastic or Inelastic. Give reasons for your answer.
The demand for salt by households.
Elasticity of demand for two goods A and B is -2 and -3 respectively. Then good A has higher elasticity.
The government wants to reduce the consumption of good by 10%. The price elasticity of demand for elasticity is -0.4. The government should raise the price of elasticity by ______.
What is the implication of a vertical demand curve?
When the price elasticity of demand for a good equals ______.
Assertion (A): Demand for a commodity with large number of substitutes with be less elastic.
Reason (R): With large number of substitutes, even a small rise in its price will induce the buyers to go for its substitutes.
How does the availability of substitutes of a commodity affect its price elasticity of demand?
Comment upon the shape of the demand curve, if Ed = 0.
Discuss any three/ four factors determining price elasticity of demand.
How does the nature of a good affect its elasticity of demand?
