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प्रश्न
Price elasticity of demand of good X is −2 and of good Y is −3. Which of the two goods has more price elasticity and why?
उत्तर
- Mathematically, −2 > −3.
- But in the context of price elasticity of demand, the minus sign indicates only an inverse relation between price and demand. It does not affect the value of elasticity. Hence, −3 > −2.
The value of Ed = −3 implies
that change in demand is 3 times
the change in price, while
Ed = −2 implies
that change in demand is 2 times
the change in price. - Therefore, demand of good Y is more elastic because one percent change in price results in a higher percentage change in demand.
संबंधित प्रश्न
What is meant by price elasticity of demand?
Give economic terms:
Degree of responsiveness of a change in quantity demanded of one commodity due to a change in the price of another commodity.
Give economic terms:
Degree of responsiveness of a change of quantity demanded of a good to a change in its price.
Statements that are related to cross elasticity of demand:
- Change in quantity demanded of one commodity due to a change in the price of other commodity
- It is a type of elasticity of demand.
- It is applicable to complementary goods and substitutes.
- It is expressed as Ey = % ΔQ / %ΔY
Find the odd word
Types of elasticity of demand -
Explain the types of elasticity of demand
Assertion (A): A change in quantity demanded of one commodity due to a change in the price of other commodity is cross elasticity.
Reasoning (R): Changes in consumers income leads to a change in the quantity demanded.
Distinguish between:
Income Elasticity of Demand and Cross Elasticity of Demand
Define income elasticity of demand.
Assertion (A): A change in quantity demanded of one commodity due to a change in the price of other commodity is cross elasticity.
Reasoning (R): Changes in consumers' income lead to a change in the quantity demanded.
Assertion (A): A change in quantity demanded of one commodity due to a change in the price of other commodity is cross elasticity.
Reasoning (R): Changes in consumers income leads to a change in the quantity demanded.
Assertion (A): A change in quantity demanded of one commodity due to a change in the price of other commodity is cross elasticity.
Reasoning (R): Changes in consumers income leads to a change in the quantity demanded.
Assertion (A): A change in quantity demanded of one commodity due to a change in the price of other commodity is cross elasticity.
Reasoning (R): Changes in consumers income leads to a change in the quantity demanded.
Assertion (A): A change in quantity demanded of one commodity due to a change in the price of other commodity is cross elasticity.
Reasoning (R): Changes in consumers income leads to a change in the quantity demanded.
What will be the effect of 10 percent rise in price of a good on its demand if price elasticity of demand is −1?
What will be the effect of 10 percent rise in price of a good on its demand if price elasticity of demand is −2?
What is meant by cross elasticity of demand?
