Advertisements
Advertisements
प्रश्न
Discuss any three/ four factors determining price elasticity of demand.
Advertisements
उत्तर
Four Factors Affecting Price Elasticity of Demand
- 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: More the number of close substitutes of a good available in the market, higher is 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: More the number of uses of a good, more likely is the demand of that good price elastic.
- Proportion of income spent: The demand of a good will be price elastic if proportion of income spent on that good is large. It is because the total expenditure on the good changes considerably.
APPEARS IN
संबंधित प्रश्न
Write Short note on the following.
Ratio method of measuring price elasticity of demand ?
State whether demand will be Elastic or Inelastic. Give reasons for your answer.
The demand for salt by households.
State whether demand will be Elastic or Inelastic. Give reasons for your answer.
A consumer prefers to postpone the purchase of a car to avail more of year ending discount.
What is the implication of a vertical demand curve?
Which of the following is the most likely reason for the relatively high elasticity of bottled water?
How does the availability of substitutes of a commodity affect its price elasticity of demand?
Comment upon the shape of the demand curve, if Ed = 0.
State 3 factors which affect price elasticity of demand.
What type of demand characterizes necessity goods compared to luxury goods?
Which statement correctly describes the relationship between postponement and price elasticity?
