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Question
What will be the effect of 10 percent rise in price of a good on its demand if price elasticity of demand is −2?
Solution
20 percent fall in demand
RELATED QUESTIONS
Give economic term:
Degree of responsiveness of quantity demanded to change in income only.
Give economic terms:
Degree of responsiveness of a change in quantity demanded of one commodity due to a change in the price of another commodity.
Give economic terms:
Degree of responsiveness of a change of quantity demanded of a good to a change in its price.
Statements that are related to cross elasticity of demand:
- Change in quantity demanded of one commodity due to a change in the price of other commodity
- It is a type of elasticity of demand.
- It is applicable to complementary goods and substitutes.
- It is expressed as Ey = % ΔQ / %ΔY
Degree of responsiveness of a change in quantity demanded to a change in the income of the consumer −
Distinguish Between
Price elasticity of demand and Income elasticity of demand
Define income elasticity of demand.
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.
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.
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.
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.
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.
Price elasticity of demand measures ______.
If commodity X and Y are complementary goods , what will be the cross elasticity of demand?
If prices of salt and coffee increase by the same proportion, will their quantity demanded behave in the same manner? Explain by giving reasons.
What will be the effect of 10 percent rise in price of a good on its demand if price elasticity of demand is −1?
Price elasticity of demand shows:
What is meant by cross elasticity of demand?
