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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
Explain any two factors that affect the price elasticity of demand. Give suitable examples.
How does change in the price of complementary good affect the demand for the given good? Explain with the help of an example.
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.
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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Which of the following is the most likely reason for the relatively high elasticity of bottled water?
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.
Explain briefly the factors on which elasticity of demand depends.
Which of the following correctly describes the relationship between availability of substitutes and price elasticity of demand?
