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प्रश्न
Explain the term elasticity of demand.
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उत्तर
Alfred Marshall was the first economist to develop the concept of price elasticity of demand as the ratio of a relative change in quantity demanded to a relative change in price. A relative measure is needed so that changes in different measures can be compared. These relative changes in demand and price are measured by percentage change. The percentage changes are independent of units. The elasticity of demand is the ratio between the percentage change in demand and percentage change in price.
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संबंधित प्रश्न
Explain the factors determining the elasticity of demand.
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?
A consumer buys 27 units of a good at a price of Rs 10 per unit. When the price falls to Rs 9 per unit, the demand rises to 30 units. What can you say about price elasticity of demand of the good through the 'expenditure approach'?
Discuss any four factors affecting price elasticity of demand.
A consumer buys 10 units of a commodity at a price of Rs. 10 per unit. He incurs an expenditure of Rs 200 on buying 20 units. Calculate price elasticity of demand by the percentage method. Comment upon the shape of demand curve based on this information.
Give reasons or explain the following statements
Demand for basic necessities is inelastic.
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.
State whether the following statement is TRUE and FALSE.
Unitary Elastic Demand rarely occurs in practice.
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?
The elasticity of demand for school bag will be ______.
