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Question
With the help of a diagram, explain the Relatively inelastic demand curve.
Solution
Relatively inelastic demand curve:
When a substantial change in prices has little effect on extension or contraction in quantity demanded of the commodity, the demand is known as relatively inelastic demand. The demands of salt, shoes, needles, etc., belong to this class.
RELATED QUESTIONS
Complete the following statement:
Price elasticity of demand on a linear demand curve at the Y-axis is equal to ________.
Assertion (A): A change in quantity demanded of one commodity due to a change in the price of another commodity is cross elasticity.
Reasoning (R): Changes in consumer income lead to a change in the quantity demanded.
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
Distinguish between:
Income Elasticity of Demand and Cross 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.
Calculate elasticity of demand on the basis of the following data.
| Price (Rs.) | Quantity (Kg) |
| 10 | 20 |
| 20 | 15 |
- Calculate the elasticity of demand.
- Is the demand elastic or inelastic?
Price elasticity of demand measures ______.
Explain any three types of price elasticity of demand with the help of diagrams.
What will be the effect of 10 percent rise in price of a good on its demand if price elasticity of demand is −2?
How is the price elasticity of demand of a commodity is affected by the number of its substitutes.
