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प्रश्न
How does the nature of a commodity affect its price elasticity of demand?
Discuss any three/four factors determining price elasticity of demand.
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उत्तर
- 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: The greater the number of close substitutes of a good available in the market, the higher 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: The greater the number of uses of a good, the more likely is the demand for that good to be elastic.
- Proportion of income spent: The demand for a good will be price elastic if the proportion of income spent on that good is large. It is because the total expenditure on the goods changes considerably.
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संबंधित प्रश्न
How does change in the price of complementary good affect the demand for the given good? Explain with the help of an example.
When price of a commodity falls by Rs 1 per unit, its quantity demanded rises by 3 units. Its price elasticity of demand is (−) 2. Calculate its quantity demanded if the price before the change was Rs 10 per unit.
Choose the correct answer :
Demand of labour is _______
Choose the correct answer :
Demand of electricity for domestic purpose is _________.
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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State whether demand will be Elastic or Inelastic. Give reasons for your answer.
The demand for salt by households.
Which of the following is the most likely reason for the relatively high elasticity of bottled water?
How does the availability of substitutes of a commodity affect its price elasticity of demand?
How does the nature of a good affect its elasticity of demand?
