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प्रश्न
The measure of price elasticity of demand of a normal good carries minus sign while price elasticity of supply carries plus sign. Explain why?
Explain the significance of 'minus sign' attached to the measure of price elasticity of demand in case of a normal good, as compared to the 'plus sign' attached to the measure of price elasticity of supply.
Why is minus sign attached to the measure of price elasticity of demand of a normal good in comparison to the plus sign attached to the measure of price elasticity of supply? Explain.
उत्तर
The measurement of price elasticity of demand for normal goods has a (–) sign because the
demand and price of the good are inversely related. It is assumed that other things remain
constant if an increase in the price of a good causes a decrease in the quantity demand for
a good.
The measurement of price elasticity of supply for normal goods has a (+) sign because the
supply and price of the good are positively related. It is assumed that other things remain
constant if an increase in the price of a good causes an increase in the quantity of supply
of goods.
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संबंधित प्रश्न
Explain the factors determining the elasticity of demand.
Price elasticity of demand for the two goods X and Y are zero and (–) 1 respectively. Which of the two is more elastic and why?
When the price of a commodity X falls by 10 percent. Its demand rises from 150 units to 180
units. Calculate is price elasticity of demand. How much should be the percentage fall in its
price so that its demand rises from 150 to 210 units?
A consumer spends Rs 60 on a good priced at Rs 5 per unit. When price rises by 20 percent, the consumer continues to spend Rs 60 on the good. Calculate the price elasticity of demand by percentage method.
A consumer spends Rs 1,000 on a good priced at Rs10 per unit. When its price falls by 20 percent, the consumer spends Rs800 on the good. Calculate the price elasticity of demand by the Percentage method
When the price of good rises from Rs10 to Rs12 per unit, its demand falls from 25 units to 20 units. What can you say about price elasticity of demand of the good through the 'expenditure approach'?
State whether the following statement is True or False :
Concept of elasticity of demand is useful for finance minister.
Fill in the blanks with appropriate alternatives given in the bracket.
Demand elasticity can be measured from demand curve by ___________ method.
Give reason or explain the following statement.
All desires are not demand.
The demand for salt is ______.
Fill in the blank with appropriate alternatives given below:
Income elasticity of demand for inferior goods is __________.
State whether the following statement is TRUE and FALSE.
Demand for luxuries is elastic.
Give reason or explain the following statement:
Demand for goods having snob appeal has elastic demand.
Answer the following question.
When the price of X doubles, its quantity demanded falls by 60 percent. Calculate its price elasticity of demand. What should be the percentage change in price so that its quantity demanded doubles?
Elasticity of the demand is available when:
What will be the effect on price elasticity of demand, if the time required to find the substitute product is more.
Identify the correctly matched pair from the items in Column A by matching them to the items in column B:
| Column A | Column B |
| 1. Increase or decrease in demand for a commodity does not cause any change in its price. | (a) Effect on supply, in the case of Perfectly Elastic Demand. |
| 2. Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant. | (b) Effect on demand, in the case of Perfectly Inelastic Supply. |
| 3. Increase or decrease in demand cause a change in the price of the commodity. Equilibrium quantity remains constant. | (c) Effect on demand, in the case of Perfectly Elastic Supply. |
| 4. Increase or decrease in demand for a commodity does not cause any change in its price. | (d) Effect on supply, in the case of Perfectly Elastic Demand. |
State with reasons whether you agree or disagree with the following statement:
The elasticity of demand gets influenced by the nature of the commodity.
Explain the term elasticity of demand.
