Advertisements
Advertisements
Question
Price elasticity of demand for the two goods X and Y are zero and (–) 1 respectively. Which of the two is more elastic and why?
Solution
When the price elasticity of demand for Good Y and Good X are zero and −1, respectively, the elasticity of demand is less than unity, i.e. Ed < 1. It is a situation of inelastic demand. Here, the demand of Good Y is perfectly elastic compared to Good X. When the price elasticity of demand for Good Y is zero, it implies that Good Y is perfectly inelastic compared to Good X.
APPEARS IN
RELATED QUESTIONS
A consumer spends Rs 1000 on a good priced at Rs 8 per unit. When price rises by 25 percent, the consumer continues to spend Rs 1000 on the good. Calculate the price elasticity of demand by percentage method.
Price elasticity of demand of a good is (-)1. When its price per unit falls by one rupee, its de from 16 to 18 units. Calculate the price before a change
Discuss any four factors affecting price elasticity of demand.
What do you mean by complements? Give examples of two goods which are complements of each other.
Explain price elasticity of demand.
The demand for salt is ______.
Fill in the blank with appropriate alternatives given below:
Cross elasticity of demand is applicable to ____________ goods.
State whether the following statement is TRUE and FALSE.
Demand for luxuries is elastic.
State whether the following statement is TRUE and FALSE.
Concept of Elasticity of Demand is useful for finance minister.
Define or explain the following concept:
Cross Elasticity of Demand
Give reason or explain the following statement:
Demand for necessaries is inelastic.
Write short answer for the following question :
Total outlay method of measuring price elasticity of demand.
Arrange the following coefficients of price elasticity of demand in ascending order:
(−) 3.1, (−) 0.2, (−) 1.1
Elasticity of the demand is available when:
Study the following table and answer the questions:
| Price of Pen (₹) | Demand for Pen |
| 10 | 500 |
| `square` | 400 |
| 30 | `square` |
| `square` | 200 |
| 50 | `square` |
Questions:
- Complete the above table.
- Which type of relationship is found between the price of a pen and demand for the pen?
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.
Explain the term elasticity of demand.
Price elasticity of demand is defined as the percentage change in the quantity demanded of a commodity divided by the percentage change in the price of that commodity.
As a result of 5% fall in the price of a good, its demand rises by 12%, the demand for the good will said be ______.
Define elasticity of demand.
