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Question
With the help of a diagram, explain the Unitary elastic demand curve.
Solution
Unitary elastic demand curve:
When the extension or contraction in quantity demanded is equally proportional to price changes, it is a case of unitary elastic demand. The demand for commodities of comforts, e.g., electric fan, umbrella, raincoat, torch, etc., belong to this class.
RELATED QUESTIONS
Give economic term:
Degree of responsiveness of quantity demanded to change in income only.
Find the odd word
Types of elasticity of demand -
Identify & explain the concept from the given illustration.
At Amulya Café, the demand for tea increased by 5% due to a 10% rise in the price of coffee.
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.
Distinguish between:
Income Elasticity of Demand and Cross 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.
Price elasticity of demand measures ______.
If commodity X and Y are complementary goods , what will be the cross elasticity of demand?
Price elasticity of demand of good X is −2 and of good Y is −3. Which of the two goods has more price elasticity and why?
