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प्रश्न
Explain any two factors that affect the price elasticity of demand. Give suitable examples.
Mention two factors affecting the price elasticity of demand.
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उत्तर
Factors affecting the price elasticity of demand are:
- Availability of substitutes: The price of a good falls in relation to its substitute. Consumers can easily switch from one good to another even if there is only a small change in price and so its demand will increase. Hence the price elasticity of demand for commodities having close substitutes is relatively high.
- Nature of good: A good can be necessary, comfort or luxury good as per the preferences of the consumers. The demand for necessary good does not fluctuate with the price as these goods are basic for day-to-day life. Hence it is inelastic. The demand for comfort and luxury goods are elastic as the consumption of these goods can be postponed.
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संबंधित प्रश्न
Choose the correct answer :
Perfectly elastic demand curve is _________.
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.
Elasticity of demand for two goods A and B is -2 and -3 respectively. Then good A has higher elasticity.
The price of Y falls from ₹ 8 to ₹ 6. The quantity demanded increases from 100 units to 125 units. The price electricity of demand will be ______.
Assertion (A): The demand for soap, salt, matches etc. is highly elastic.
Reason (R): The demand for soap, salt, matches etc. is highly inelastic because the consumer spends a very small amount of expenditure in relation to his/her income.
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.
State 3 factors which affect price elasticity of demand.
How does the nature of a good affect its elasticity of demand?
Which of the following correctly describes the relationship between availability of substitutes and price elasticity of demand?
