Advertisements
Advertisements
प्रश्न
Explain any two factors that affect the price elasticity of demand. Give suitable examples.
Mention two factors affecting the price elasticity of demand.
Advertisements
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.
APPEARS IN
संबंधित प्रश्न
A 5 percent fall in the price of a good raises its demand from 300 units to 318 units. Calculate its price elasticity of demand.
Choose the correct answer :
Perfectly elastic demand curve is _________.
Choose the correct answer :
Demand of labour is _______
The coefficient of price elasticity of demand for Good X is (−) 0.2. If there is a 5% increase in the price of the good, by what percentage will the quantity demanded for the good fall?
What is the implication of a vertical demand curve?
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 ______.
When the price elasticity of demand for a good equals ______.
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.
