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Question
Define or explain the following concept:
Elastic Demand
Solution
Elastic demand for a good implies that the demand for a good is highly responsive to its price. In this case, the percentage change in demand is greater than the percentage change in price and |Ed| > 1. This implies that a little change in price will lead to a significant change in quantity demanded.
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RELATED QUESTIONS
Total expenditure method of measuring Elasticity of Demand.
Total cost is the total expenditure incurred by a firm.
When price of good is Rs7 per unit a consumer buys 12 units. When price falls to Rs6 per unit he spends Rs72 on the good. Calculate price elasticity of demand by using the percentage method. Comment on the likely shape of demand curve based on this measure of elasticity.
Define or explain the following concepts
Total output
Define or explain the following concept :
Elasticity of demand .
Distinguish between (Any Three)
Relatively more elastic demand and relatively less elastic demand.
Write short note on:
Ratio method
The price of a commodity increase from ₹ 10 to ₹ 14. Calculate percentage fall in quantity demanded of the commodity if the coefficient of price elasticity of demand is (−) 1.25.
When percentage change in quantity demanded is equal to percentage change in price, then demand for such a commodity is said to be ______
If the percentage increase in the quantity demanded of a commodity is less than the percentage fall in its price, then elasticity of demand is ______
When there are infinitely small changes in price and demand, then the ______ method is used.
Assertion (A): Elasticity of supply of gold is unitary elastic.
Reason (R): The unitary elastic supply is equal to one R.
