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प्रश्न
Define price elasticity of demand.
उत्तर
It is the measure of the degree of responsiveness of the demand for a good to the changes in its price. It is defined as the percentage change in the demand for a good divided by the percentage change in its price.
`"ed" = "Percentage change in demand for good"/"Percentage change in price of that good"`
`"ed" = (Δ"Q")/(Δ"P") xx "P"/"Q"`
Where ΔQ = Q2 − Q1, change in demand
ΔP = P2 − P1, change in price
P1 = Initial price
Q1 = Initial quantity
संबंधित प्रश्न
A consumer spends Rs 1000 on a good priced at Rs 8 per unit. When price rises by 25 percent, the consumer continues to spend Rs 1000 on the good. Calculate the price elasticity of demand by percentage method.
What do you mean by a normal good?
What do you mean by complements? Give examples of two goods which are complements of each other.
Explain price elasticity of demand.
Consider the demand for a good. At price Rs 4, the demand for the good is 25 units. Suppose the price of the good increases to Rs 5, and as a result, the demand for the good falls to 20 units. Calculate the price elasticity.
Fill in the blank with appropriate alternatives given below:
Income elasticity of demand for inferior goods is __________.
Fill in the blank with appropriate alternatives given below:
Perfectly elastic demand curve is ________________.
Fill in the blank with appropriate alternatives given below:
The slope of demand curve is _______________ in case of inelastic demand.
State whether the following statement is TRUE and FALSE.
Demand for luxuries is elastic.
State whether the following statement is TRUE and FALSE.
Total outlay is price multiplied by quantity.
Define or explain the following concept:
Income Elasticity of Demand
Give reason or explain the following statement:
Demand for goods having snob appeal has elastic demand.
Answer the following question.
Draw diagrams to show the elasticity of demand when it is:
(i) Greater than one
(ii) Less than one
(iii) Unity
Arrange the following coefficients of price elasticity of demand in ascending order:
(−) 3.1, (−) 0.2, (−) 1.1
What will be the effect on price elasticity of demand, if the time required to find the substitute product is more.
Assertion (A): The elastic demand curve for luxuries is flatter than normal.
Reason (R): The coefficient of Elasticity ranges between 0 and 1.
Study the following table and answer the questions:
| Price of Pen (₹) | Demand for Pen |
| 10 | 500 |
| `square` | 400 |
| 30 | `square` |
| `square` | 200 |
| 50 | `square` |
Questions:
- Complete the above table.
- Which type of relationship is found between the price of a pen and demand for the pen?
mention any two examples of composite demand.
When is the demand for a good said to be elastic?
