Question

Distinguish between price elasticity, cross elasticity and income elasticity of demand.

Answer 1

Price elasticity	Cross elasticity	Income elasticity
Price elasticity of demand may be defined as the degree of responsiveness of quantity demanded of a commodity in response to a change in its price.	Cross elasticity of demand is defined as the percentage change in quantity demanded of a commodity with respect to the percentage change in the price of its related commodity.	Income elasticity of demand measures the degree of responsiveness of the quantity demanded of a commodity to a changes in income of the consumers.
Price elasticity helps to measure the degree of responsiveness of demand for a commodity to change in its price.	Cross elasticity of demand is used to express such a situation. The degree of responsiveness of quantity demanded of one commodity to a change in the price of another commodity is called the cross elasticity of demand.	Income elasticity helps to measure the responsiveness of demand for a commodity to change in the consumer's income.
ep = `"Percentage change in quantity demanded"/"Percentage change in price"`	eXY = `"Percentage change in the quantity demanded of cornrriodity X"/"Percentage change in the price of commodity Y"`	ey = `"Percentage change in Quantity Demanded"/"Percentage change in Income"`
Five types of price elasticity: Perfectly inelastic Perfectly elastic Unitary elastic Relatively inelastic Relatively elastic	Three types of Cross elasticity: Positive Cross Elasticity of Demand Negative Cross Elasticity of Demand Zero Cross Elasticity of Demand	Three types of income elasticity: Zero income elasticity Positive income elasticity Negative income elasticity.