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प्रश्न
With the help of a diagram, explain the condition when EP < 1.
उत्तर
Ep < 1: Inelastic Demand
If the price of the commodity falls, total expenditure decreases, and with a rise in its price, total expenditure increases, then demand for that commodity will be inelastic or less than one. In other words, when there is a direct relationship between the price and total expenditure, the price elasticity of demand will be less than one.
Diagram: The demand curve is relatively steeper, indicating that a large change in price leads to a smaller change in quantity demanded.
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संबंधित प्रश्न
The price elasticity of demand on a linear demand curve at the X-axis is ______.
Complete the correlation.
Ratio method : Ed = `(% Delta "Q")/(%Delta"P"):: "______" : Ed = ("Lower segment")/("Upper segment")`
As a result of a 5% increase in price, the demand for commodity X increases by 12%. The price elasticity of demand will be ______.
If the price of a commodity decreases from ₹ 70 per unit to ₹ 60 per unit and the quantity demanded remains the same, then the price elasticity of demand for that commodity will be ______.
Assertion (A): Suppose that a 2 per cent drop in the price of chocolate causes a 2 per cent increase in quantity demanded. This case is termed unit elasticity.
Reason (R): In this example, Ed is exactly 1 (or unity). Ed = `2/2=1`
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