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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
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.
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The demand of foodgrains is inelastic.
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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 ________________.
State whether the following statement is TRUE and FALSE.
Total outlay is price multiplied by quantity.
Give reason or explain the following statement:
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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.
State whether the following statement is true or false. Give valid reasons in support of your answer.
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State whether the following statement is true or false. Give valid reasons in support of your answer.
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Choose the correct answer from given options.
The expenditure on a good would change in the opposite direction as the price changes only when demand is ______
The concept of elasticity of demand was introduced by
Identify the correct pair of items from the following Columns I and II:
| Columns I | Columns II |
| (1) Perfectly elastic supply | (a) Es > 1 |
| (2) Perfectly inelastic supply | (b) Es < 1 |
| (3) Unitary elastic supply | (c) Es = 1 |
| (4) Relatively elastic supply | (d) Es = 0 |
Identify the correctly matched pair from the items in Column A by matching them to the items in column B:
| Column A | Column B |
| 1. Increase or decrease in demand for a commodity does not cause any change in its price. | (a) Effect on supply, in the case of Perfectly Elastic Demand. |
| 2. Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant. | (b) Effect on demand, in the case of Perfectly Inelastic Supply. |
| 3. Increase or decrease in demand cause a change in the price of the commodity. Equilibrium quantity remains constant. | (c) Effect on demand, in the case of Perfectly Elastic Supply. |
| 4. Increase or decrease in demand for a commodity does not cause any change in its price. | (d) Effect on supply, in the case of Perfectly Elastic Demand. |
As a result of 5% fall in the price of a good, its demand rises by 12%, the demand for the good will said be ______.
When change in price is greater than the change in quantity demand it is a case of elastic demand.
- Luxuries goods have generally elastic demand.
- Goods whose close substitutes are available have inelastic demand.
When is the demand for a good said to be elastic?
Who introduced the concept of elasticity of demand?
Which statement about the law of demand and elasticity of demand is true?
