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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
Explain any two factors that affect the price elasticity of demand. Give suitable examples.
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 labour is _______
The account in which the specific amount is deposited per month regularly is known as ______.
What is the implication of a vertical demand curve?
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.
Comment upon the shape of the demand curve, if Ed = 0.
