Advertisements
Advertisements
Question
When can the income elasticity of demand be negative?
Solution
In the case of inferior goods, the income elasticity of demand is negative. It shows that as income rises, so does the demand for lower-quality goods, and vice versa.
APPEARS IN
RELATED QUESTIONS
Income elasticity of demand.
The demand for good rises by 20 percent as a result of all in its price. Its price elasticity of demand is (−) 0.8. Calculate the percentage fall in price.
Write short answer for the following question :
Explain the Fectors Determinants of Elastacity of Demand?
______ refers to the effects of a change in price of commodity X on demand for commodity Y when quantity demanded.
Which of the following influence price elasticity of demand?
Which of the following statement is true?
As we move along a downward sloping straight-line demand curve from left to right, price elasticity of demand ______
______ refers to the minimum price, fixed by the government, which is above the equilibrium price.
When price falls with rise in output, TR is ______ when MR is zero
Statement 1: The supply of the commodity can also decrease when the price remains constant.
Statement 2: Due to rise in price of factor of production or inputs.
The supply curve of good shifts to the right when the price of other goods ______.
Identify the correctly matched pair of the items in Column A to that of Column B.
| Column A | Column B |
| 1. Unitary elastic supply curve | (a) U-shaped supply curve |
| 2. Relatively elastic supply curve | (b) Vertical line parallel to Y-axis |
| 3. Perfectly elastic supply curve | (c) Horizontal line parallel to X-axis. |
| 4. Perfectly inelastic supply curve | (d) Downward sloping supply curve |
Which of the following factor affects the individual demand?
When the actual price of a commodity is less than the equilibrium price, then equilibrium price ______
If the price of a commodity and total expenditure on that commodity change in the same direction, the price elasticity of demand will be ______.
If the price elasticity of demand for a commodity is 2 and the percentage change in price is 5, the percentage change in quantity demanded will be ______.
If the price hike in the market is about 10% and this leads to the fall in the quantity demanded by 12%, calculate the price elasticity of demand. Mention the degree of price elasticity of demand.
