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प्रश्न
How does the availability of substitutes of a commodity affect its price elasticity of demand?
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उत्तर
The price elasticity of demand for goods depends on the availability of substitutes in the market. The more substitutes available, the higher the price elasticity of demand for that good. This is because when prices change, buyers can easily shift from one substitute to another.
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.
Explain the effect of the following on the price elasticity of demand of a commodity:
(i) Number of substitutes
(ii) Nature of the commodity
State whether the following statement is true or false :
Concept of ‘elasticity of demand’ is useful for the finance minister.
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?
State whether demand will be Elastic or Inelastic. Give reasons for your answer.
The demand for salt by households.
Elasticity of demand for two goods A and B is -2 and -3 respectively. Then good A has higher elasticity.
What is the implication of a vertical demand curve?
Which of the following is the most likely reason for the relatively high elasticity of bottled water?
Assertion (A): The demand for soap, salt, matches etc. is highly elastic.
Reason (R): The demand for soap, salt, matches etc. is highly inelastic because the consumer spends a very small amount of expenditure in relation to his/her income.
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.
The nature of a commodity determines its price elasticity of demand. Explain.
State 3 factors which affect price elasticity of demand.
Discuss any three/ four factors determining price elasticity of demand.
How does the nature of a commodity affect its price elasticity of demand?
What type of demand characterizes necessity goods compared to luxury goods?
How does the time period affect the elasticity of demand?
What effect do habitual consumption patterns have on price elasticity of demand?
