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प्रश्न
Define price elasticity of demand.
Define Price elasticity of demand for a commodity.
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उत्तर
It is the measure of the degree of responsiveness of the demand for a good to the changes in its price. It is defined as the percentage change in the demand for a good divided by the percentage change in its price.
ed = `"Percentage change in demand for good"/"Percentage change in price of that good"`
ed = `(ΔQ)/(ΔP) xx P/Q`
Where ΔQ = Q2 − Q1, change in demand
ΔP = P2 − P1, change in price
P1 = Initial price
Q1 = Initial quantity
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संबंधित प्रश्न
Income elasticity of demand for inferior goods is negative.
Demand for the commodity having multiple uses has elastic demand.
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As we move along a downward sloping straight line demand curve from left to right, price
an elasticity of demand : (choose the correct alternative)
(a) remains unchanged
(b) goes on falling
(c) goes on rising
(d) falls initially then rises
When the price of a commodity X falls by 10 percent. Its demand rises from 150 units to 180
units. Calculate is price elasticity of demand. How much should be the percentage fall in its
price so that its demand rises from 150 to 210 units?
A consumer spends Rs 60 on a good priced at Rs 5 per unit. When price rises by 20 percent, the consumer continues to spend Rs 60 on the good. Calculate the price elasticity of demand by percentage method.
A consumer spends Rs 100 on a good priced at Rs 4 per unit. When its price falls by 25 percent, the consumer spends Rs 75 on the good. Calculate the price elasticity of demand by the Percentage method.
A consumer buys 30 units of a good at a price of the Rs10per unit. The price elasticity of demand for the good is (-) 1. How many units will the consumer buy at a price of Rs 9 per unit? Calculate.
When the price of a good falls from Rs 10 to Rs 8 per unit, its demand rises from 20 units to 24 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.
Explain any 'two methods' of measuring price elasticity of demand.
Define or explain the following concept.
Unitary elastic demand.
Give reasons or explain the following statements
Demand for basic necessities is inelastic.
Explain price elasticity of demand.
Consider the demand for a good. At price Rs 4, the demand for the good is 25 units. Suppose the price of the good increases to Rs 5, and as a result, the demand for the good falls to 20 units. Calculate the price elasticity.
The demand for salt is ______.
Fill in the blank with appropriate alternatives given below:
Income elasticity of demand for inferior goods is __________.
Fill in the blank with appropriate alternatives given below:
Cross elasticity of demand is applicable to ____________ goods.
State whether the following statement is TRUE and FALSE.
Total outlay is price multiplied by quantity.
State whether the following statement is TRUE and FALSE.
Unitary Elastic Demand rarely occurs in practice.
State whether the following statement is TRUE and FALSE.
Concept of Elasticity of Demand is useful for finance minister.
Define or explain the following concept:
Income Elasticity of Demand
Give reason or explain the following statement:
Demand for habitual goods is inelastic.
Give reason or explain the following statement:
Concept of Elasticity of Demand helps trade union leaders.
Give reason or explain the following statement:
Demand for goods having snob appeal has elastic demand.
Answer the following question.
If the price of a commodity rises by 40% and its quantity demanded falls from150 units to 120 units, calculate the coefficient of price elasticity of demand for the commodity.
State whether the following statement is true or false. Give valid reasons in support of your answer.
Luxury goods often have lower 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.
What are the methods of measuring Elasticity of demand?
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 |
If a good takes up a significant share of consumers' budget, its demand will be ______.
Elasticity of the demand is available when:
Identify the correctly matched pair from the items in Column A by matching them to the items in column B:
| Column A | Column B |
| 1. Increase or decrease in demand for a commodity does not cause any change in its price. | (a) Effect on supply, in the case of Perfectly Elastic Demand. |
| 2. Increase or decrease in demand causes a change in the price of the commodity. Equilibrium quantity remains constant. | (b) Effect on demand, in the case of Perfectly Inelastic Supply. |
| 3. Increase or decrease in demand cause a change in the price of the commodity. Equilibrium quantity remains constant. | (c) Effect on demand, in the case of Perfectly Elastic Supply. |
| 4. Increase or decrease in demand for a commodity does not cause any change in its price. | (d) Effect on supply, in the case of Perfectly Elastic Demand. |
Explain the term elasticity of demand.
- Luxuries goods have generally elastic demand.
- Goods whose close substitutes are available have inelastic demand.
When is the demand for a good said to be elastic?
Which type of good typically has inelastic demand?
