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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
A 5 percent fall in the price of a good raises its demand from 300 units to 318 units. Calculate its price elasticity of demand.
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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The coefficient of price elasticity of demand for Good X is (−) 0.2. If there is a 5% increase in the price of the good, by what percentage will the quantity demanded for the good fall?
Elasticity of demand for two goods A and B is -2 and -3 respectively. Then good A has higher elasticity.
Which of the following is the most likely reason for the relatively high elasticity of bottled water?
The nature of a commodity determines its price elasticity of demand. Explain.
Explain briefly the factors on which elasticity of demand depends.
How does the nature of a commodity affect its price elasticity of demand?
How does the nature of a good affect its elasticity of demand?
What type of demand characterizes necessity goods compared to luxury goods?
