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प्रश्न
What are the methods of measuring Elasticity of demand?
State the methods to measure elasticity of demand.
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उत्तर
There are three methods of measuring the elasticity of demand.
The percentage method:
Ep = `(ΔQ)/(ΔP)xx P/Q`
It is also known as the ratio method when we measure the ratio as
Ep = `(%ΔQ)/(%ΔP)`
% ∆Q = percentage change in demand, %∆P = Percentage change in price.
Total outlay method:
Marshall suggested that the simplest way to decide whether demand is elastic or inelastic is to examine the change in the total outlay of the consumer or total revenue of the firm.
Total revenue = Price × Quantity sold
TR = P × Q
Total outlay method:
| Price | Quantity Demanded | Total Outlay | Elasticity |
| 150 | 3 | 450 | e > 1 |
| 125 | 4 | 500 | e = 1 |
| 100 | 5 | 500 | e < 1 |
| 75 | 6 | 450 |
Demand is elastic if there is an inverse relationship between price and total outlay, and direct relation means inelastic. Elasticity is unity when the total outlay is constant.
संबंधित प्रश्न
Income elasticity of demand for inferior goods is negative.
Demand for the commodity having multiple uses has elastic demand.
Price elasticity of demand of goods X is -2 and goods Y is -3. Which of the two goods is more price elastic and why?
Price elasticity of demand for the two goods X and Y are zero and (–) 1 respectively. Which of the two is more elastic and why?
The measure of price elasticity of demand of a normal good carries minus sign while price elasticity of supply carries plus sign. Explain why?
A consumer buys 27 units of a good at a price of Rs 10 per unit. When the price falls to Rs 9 per unit, the demand rises to 30 units. What can you say about price elasticity of demand of the good through the 'expenditure approach'?
Price elasticity of demand of a good is (-) 1. Calculate the percentage change in price that will raise the demand from 20 units to 30 units.
Discuss any four factors affecting price elasticity of demand.
8 units of a good are demanded at a price of Rs 7 per unit. Price elasticity of demand is (−) 1. How many units will be demanded if the price rises to Rs 8 per unit? Use expenditure approach of price elasticity of demand to answer this question.
Write a short note on factors determining elasticity of demand.
Give reasons or explain the following statements
Demand for basic necessities is inelastic.
State whether the following statements are TRUE or FALSE :
The demand of foodgrains is inelastic.
What do you mean by an ‘inferior good’? Give some examples.
Fill in the blank with appropriate alternatives given below:
Perfectly elastic demand curve is ________________.
State whether the following statement is TRUE and FALSE.
Demand for luxuries is elastic.
State whether the following statement is TRUE and FALSE.
Unitary Elastic Demand rarely occurs in practice.
Give reason or explain the following statement:
Demand for necessaries is inelastic.
Give reason or explain the following statement:
Demand for habitual goods is inelastic.
Write short answer for the following question :
Total outlay method of measuring price elasticity of demand.
Draw a diagram to show the elasticity of demand when it is greater than one.
Define price elasticity of demand.
Choose the correct answer from given options.
The expenditure on a good would change in the opposite direction as the price changes only when demand is ______
Assertion (A): Elasticity of demand explains that one variable is influenced by another variable.
Reasoning (R): The concept of elasticity of demand indicates the effect of price and changes in other factors on demand.
The concept of elasticity of demand was introduced by
What are the degrees of price elasticity of Demand?
If quantity supplied increases by 60% due to a 50% increase in price, then elasticity of supply is ______
Identify the correct pair of items from the following Columns I and II:
| Columns I | Columns II |
| (1) Perfectly elastic supply | (a) Es > 1 |
| (2) Perfectly inelastic supply | (b) Es < 1 |
| (3) Unitary elastic supply | (c) Es = 1 |
| (4) Relatively elastic supply | (d) Es = 0 |
Assertion (A): The elastic demand curve for luxuries is flatter than normal.
Reason (R): The coefficient of Elasticity ranges between 0 and 1.
Explain the term elasticity of demand.
Define elasticity of demand.
When is the demand for a good said to be elastic?
What is meant by elastic demand?
What does elasticity of demand measure?
Who introduced the concept of elasticity of demand?
What is unit elasticity of demand?
