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प्रश्न
Discuss any three/ four factors determining price elasticity of demand.
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उत्तर
Four Factors Affecting Price Elasticity of Demand
- Nature of the goods: More necessary the good for a consumer, less elastic is the demand for the good. This is because it is difficult to give up the consumption of a necessary good.
- Number of substitutes: More the number of close substitutes of a good available in the market, higher is the price elasticity of that good. It is because a consumer can easily shift from one substitute to another in case of a price change.
- Number of uses: More the number of uses of a good, more likely is the demand of that good price elastic.
- Proportion of income spent: The demand of a good will be price elastic if proportion of income spent on that good is large. It is because the total expenditure on the good changes considerably.
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संबंधित प्रश्न
State whether the following statement is true or false :
Concept of ‘elasticity of demand’ is useful for the finance minister.
Write Short note on the following.
Ratio method of measuring price elasticity of demand ?
Choose the correct answer :
Perfectly elastic demand curve is _________.
State whether the following statements are TRUE or FALSE :
The demand of foodgrains is inelastic.
Match the following:
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Group A
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Group B
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1. Cars and petrol
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a. Elastic demand
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2. Point method
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b. Complementary
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3. Necessary goods
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c. Geometric method
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d. Inelastic demand
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What is the implication of a vertical demand curve?
When the price elasticity of demand for a good equals ______.
Assertion (A): Demand for a commodity with large number of substitutes with be less elastic.
Reason (R): With large number of substitutes, even a small rise in its price will induce the buyers to go for its substitutes.
State 3 factors which affect price elasticity of demand.
Which of the following correctly describes the relationship between availability of substitutes and price elasticity of demand?
