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प्रश्न
How does the nature of a commodity affect its price elasticity of demand?
Discuss any three/four factors determining price elasticity of demand.
उत्तर
- Nature of the goods: More necessary the good for a consumer, less elastic is the demand for the good. This is because it is difficult to give up the consumption of a necessary good.
- Number of substitutes: The greater the number of close substitutes of a good available in the market, the higher the price elasticity of that good. It is because a consumer can easily shift from one substitute to another in case of a price change.
- Number of uses: The greater the number of uses of a good, the more likely is the demand for that good to be elastic.
- Proportion of income spent: The demand for a good will be price elastic if the proportion of income spent on that good is large. It is because the total expenditure on the goods changes considerably.
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संबंधित प्रश्न
When price of a commodity falls by Rs 1 per unit, its quantity demanded rises by 3 units. Its price elasticity of demand is (−) 2. Calculate its quantity demanded if the price before the change was Rs 10 per unit.
Choose the correct answer :
Perfectly elastic demand curve is _________.
State whether the following statements are TRUE or FALSE :
The demand of foodgrains is inelastic.
Match the following:
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Group A
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Group B
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1. Cars and petrol
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a. Elastic demand
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2. Point method
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b. Complementary
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3. Necessary goods
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c. Geometric method
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d. Inelastic demand
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The coefficient of price elasticity of demand for Good X is (−) 0.2. If there is a 5% increase in the price of the good, by what percentage will the quantity demanded for the good fall?
When the price elasticity of demand for a good equals ______.
Assertion (A): The demand for soap, salt, matches etc. is highly elastic.
Reason (R): The demand for soap, salt, matches etc. is highly inelastic because the consumer spends a very small amount of expenditure in relation to his/her income.
The nature of a commodity determines its price elasticity of demand. Explain.
State 3 factors which affect price elasticity of demand.
Discuss any three/ four factors determining price elasticity of demand.
