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प्रश्न
Discuss any four factors affecting price elasticity of demand.
Explain briefly the factors on which elasticity of demand depends.
Discuss any three/four factors determining price elasticity of demand.
State two factors determining price elasticity of demand.
Explain any four factors on which price elasticity of demand depends.
Explain briefly three determinants of elasticity of demand.
Explain any three factors that affect elasticity of demand.
Explain any factors affecting price elasticity of demand.
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उत्तर
- Nature of good: If the commodity is a necessity, its demand will not change much when its price changes. The elasticity of demand will be low. The demand for rice, wheat, etc., is relatively inelastic. The demand for luxury goods is elastic. When the price of televisions increases, some people may refrain from purchasing televisions. Hence the demand for televisions will fall and the elasticity of demand will be high.
- Alternative uses of goods: The elasticity of demand, which can be put to a variety of uses, will be relatively elastic. For example, electricity can be used for cooking, lighting, washing etc. When the cost of electricity increases, the consumers can cut down on some of the uses of electricity, confining themselves to the most urgent uses. Hence, the demand will be elastic.
- Income of the consumer: The elasticity of demand is also influenced by the income of the consumer. If the consumer is rich, he or she will not be bothered by small changes in prices. Such changes will leave the demand unaffected. The demand for this consumer will be relatively inelastic. A poor consumer, on the other hand, will attach importance even to small changes in prices and the demand will be elastic.
- Availability of substitutes: The elasticity of demand for a commodity also depends on the existence of substitute commodities. If substitutes exist, these will be used in place of the commodity in question when its price increases. The demand for this commodity will fall and will be elastic. This is how the existence of tea makes the demand for coffee elastic.
Notes
Students should refer to the answer according to their questions.
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संबंधित प्रश्न
Income elasticity of demand for inferior goods is negative.
Price elasticity of demand of goods X is -2 and goods Y is -3. Which of the two goods is more price elastic and why?
The price elasticity of demand for a good is - 0.4. If its price increases by 5 percent, by what percentage will its demand fall? Calculate.
What will be the effect of 10 percent rise in price of a good on its demand if price elasticity of demand is (a) Zero, (b)-1, (c)-2.
Price elasticity of demand for the two goods X and Y are zero and (–) 1 respectively. Which of the two is more elastic and why?
When the price of good rises from Rs10 to Rs12 per unit, its demand falls from 25 units to 20 units. What can you say about price elasticity of demand of the good through the 'expenditure approach'?
State whether the following statement is True or False :
Concept of elasticity of demand is useful for finance minister.
State whether the following statement isTrue or False with reason:
The concept of elasticity of demand is useful in economic theory.
State whether the following statements are TRUE or FALSE :
The demand of foodgrains is inelastic.
Consider the demand curve D(p) = 10 − 3p. What is the elasticity at price `5/3` ?
Fill in the blank with appropriate alternatives given below:
Income elasticity of demand for inferior goods is __________.
Fill in the blank with appropriate alternatives given below:
Perfectly elastic demand curve is ________________.
Fill in the blank with appropriate alternatives given below:
Cross elasticity of demand is applicable to ____________ goods.
Fill in the blank with appropriate alternatives given below:
The slope of demand curve is _______________ in case of inelastic demand.
State whether the following statement is TRUE and FALSE.
Demand for luxuries is elastic.
State whether the following statement is TRUE and FALSE.
Total outlay is price multiplied by quantity.
Define the following concept:
Cross Elasticity of Demand
State whether the following statement is true or false. Give valid reasons in support of your answer.
The coefficient of price elasticity of demand for the commodity is inversely related to the number of alternative uses of the commodity.
Arrange the following coefficients of price elasticity of demand in ascending order:
(−) 3.1, (−) 0.2, (−) 1.1
Give an economic term:
Elasticity resulting from a proportionate change in quantity demanded due to a proportionate change in price.
Assertion (A): Elasticity of demand explains that one variable is influenced by another variable.
Reasoning (R): The concept of elasticity of demand indicates the effect of price and changes in other factors on demand.
Study the following table and answer the questions:
| Price of Pen (₹) | Demand for Pen |
| 10 | 500 |
| `square` | 400 |
| 30 | `square` |
| `square` | 200 |
| 50 | `square` |
Questions:
- Complete the above table.
- Which type of relationship is found between the price of a pen and demand for the pen?
The price of a good decreases from ₹100 to 80 per unit. If the price elasticity of demand for the good is 2 and the original quantity demanded is 30 units, calculate the new quantity demanded.
When change in price is greater than the change in quantity demand it is a case of elastic demand.
Define elasticity of demand.
When is the demand for a good said to be elastic?
What is meant by elastic demand?
Who introduced the concept of elasticity of demand?
