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प्रश्न
Define price elasticity of demand.
Define Price elasticity of demand for a commodity.
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उत्तर
It is the measure of the degree of responsiveness of the demand for a good to the changes in its price. It is defined as the percentage change in the demand for a good divided by the percentage change in its price.
ed = `"Percentage change in demand for good"/"Percentage change in price of that good"`
ed = `(ΔQ)/(ΔP) xx P/Q`
Where ΔQ = Q2 − Q1, change in demand
ΔP = P2 − P1, change in price
P1 = Initial price
Q1 = Initial quantity
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संबंधित प्रश्न
A consumer buys 18 units of a good at a price of Rs 9 per unit. The price elasticity of demand for the good is (–) 1. How many units the consumer will buy at a price of Rs 10 per unit? Calculate.
When the price of good rise from Rs 10 per unit to Rs 12 per unit, its quantity demanded falls by 20 percent. Calculate its price elasticity of demand. How much would be the percentage change in its quantity demanded, if the price rises from Rs 10 per unit to Rs 13 per unit?
A consumer spends Rs 400 on a good priced at Rs 4 per unit. When the price rises by 25 percent, the consumer continues to spend Rs 400. Calculate the price elasticity of demand by percentage method.
8 units of a good are demanded at a price of Rs 7 per unit. Price elasticity of demand is (−) 1. How many units will be demanded if the price rises to Rs 8 per unit? Use expenditure approach of price elasticity of demand to answer this question.
Write a short note on factors determining elasticity of demand.
What do you mean by an ‘inferior good’? Give some examples.
Consider the demand for a good. At price Rs 4, the demand for the good is 25 units. Suppose the price of the good increases to Rs 5, and as a result, the demand for the good falls to 20 units. Calculate the price elasticity.
Give reason or explain the following statement.
All desires are not demand.
Fill in the blank with appropriate alternatives given below:
Perfectly elastic demand curve is ________________.
Define or explain the following concept:
Unitary Elastic Demand
Define or explain the following concept:
Income Elasticity of Demand
Give reason or explain the following statement:
Demand for habitual goods is inelastic.
Answer the following question.
If the price of a commodity rises by 40% and its quantity demanded falls from150 units to 120 units, calculate the coefficient of price elasticity of demand for the commodity.
Answer the following question.
When the price of X doubles, its quantity demanded falls by 60 percent. Calculate its price elasticity of demand. What should be the percentage change in price so that its quantity demanded doubles?
Arrange the following coefficients of price elasticity of demand in ascending order:
(−) 3.1, (−) 0.2, (−) 1.1
Assertion (A): The elastic demand curve for luxuries is flatter than normal.
Reason (R): The coefficient of Elasticity ranges between 0 and 1.
State with reasons whether you agree or disagree with the following statement:
The elasticity of demand gets influenced by the nature of the commodity.
When is the demand for a good said to be elastic?
What is meant by elastic demand?
