Advertisements
Advertisements
Question
Define or explain the following concept :
Elasticity of demand .
Solution
Elasticity of Demand is the degree of responsiveness of quantity demand for a commodity towards change in its price. It is calculated as `E_d = (% text { change in demand for × good })/(text { % change in price of × good })`
APPEARS IN
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
Distinguish between (Any Three)
Relatively more elastic demand and relatively less elastic demand.
Define or explain the following concept:
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.
