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प्रश्न
The nature of a commodity determines its price elasticity of demand. Explain.
How does the nature of a good affect its elasticity of demand?
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उत्तर
Elasticity of demand of a good is influenced by its nature in the following ways:
- When a commodity is a necessity, its demand is generally inelastic (Ed < 1) → food grains, salt, school uniform etc.
- When a commodity is a comfort, its demand is generally unit elastic (Ed = 1) → cooler, TV, mobile phone etc.
- When a commodity is a luxury, its demand is generally elastic (Ed > 1) → car, home theatre, air conditioner etc.
संबंधित प्रश्न
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 electricity for domestic purpose is _________.
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?
Explain briefly the factors on which elasticity of demand depends.
When will the demand curve be parallel to x-axis?
Comment upon the shape of the demand curve, if Ed = 0.
How does the nature of a commodity affect its price elasticity of demand?
How does the time period affect the elasticity of demand?
Which statement correctly describes the relationship between postponement and price elasticity?
