Advertisements
Advertisements
Question
Define elasticity of demand.
Solution
Price elasticity of demand tells us the amount of the change in the quantity demanded of a commodity in response to change in its price. In other words, it measures the degree of change of demand in response to changes in price.
APPEARS IN
RELATED QUESTIONS
The price elasticity of demand for a good is - 0.4. If its price increases by 5 percent, by what percentage will its demand fall? Calculate.
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
Discuss any four factors affecting price elasticity of demand.
Give reason or explain the following statement:
Demand for habitual goods is inelastic.
Give reason or explain the following statement:
Demand for commodity having multiple uses has elastic demand.
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.
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.
The elasticity of demand for school bag will be ______.
- Luxuries goods have generally elastic demand.
- Goods whose close substitutes are available have inelastic demand.
