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प्रश्न
What are the methods of measuring Elasticity of demand?
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उत्तर
There are three methods of measuring the elasticity of demand.
The percentage method:
Ep = `(ΔQ)/(ΔP)xx P/Q`
It is also known as the ratio method when we measure the ratio as
Ep = `(%ΔQ)/(%ΔP)`
% ∆Q = percentage change in demand, %∆P = Percentage change in price.
Total outlay method:
Marshall suggested that the simplest way to decide whether demand is elastic or inelastic is to examine the change in the total outlay of the consumer or total revenue of the firm.
Total revenue = Price × Quantity sold
TR = P × Q
Total outlay method:
| Price | Quantity Demanded | Total Outlay | Elasticity |
| 150 | 3 | 450 | e > 1 |
| 125 | 4 | 500 | e = 1 |
| 100 | 5 | 500 | e < 1 |
| 75 | 6 | 450 |
Demand is elastic if there is an inverse relationship between price and total outlay, and direct relation means inelastic. Elasticity is unity when the total outlay is constant.
संबंधित प्रश्न
Demand for the commodity having multiple uses has elastic demand.
A consumer buys 18 units of a good at a price of Rs 9 per unit. The price elasticity of demand for the good is (–) 1. How many units the consumer will buy at a price of Rs 10 per unit? Calculate.
The price elasticity of demand for a good is - 0.4. If its price increases by 5 percent, by what percentage will its demand fall? Calculate.
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 400 on a good priced at Rs 8 per unit. When its price rises by 25 percent, the consumer spends Rs 500 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.
A consumer buys 27 units of a good at a price of Rs 10 per unit. When the price falls to Rs 9 per unit, the demand rises to 30 units. What can you say about price elasticity of demand of the good through the 'expenditure approach'?
Explain any 'two methods' of measuring price elasticity of demand.
State whether the following statement isTrue or False with reason:
The concept of elasticity of demand is useful in economic theory.
Give reasons or explain the following statements
Demand for basic necessities is inelastic.
Fill in the blanks with appropriate alternatives given in the bracket.
Demand elasticity can be measured from demand curve by ___________ method.
What do you mean by a normal good?
Fill in the blank with appropriate alternatives given below:
Income elasticity of demand for inferior goods is __________.
State whether the following statement is TRUE and FALSE.
Demand for luxuries is elastic.
Define the following concept:
Cross Elasticity of Demand
Give reason or explain the following statement:
Demand for habitual goods is inelastic.
Give reason or explain the following statement:
Demand for goods having snob appeal has elastic demand.
Define price elasticity of 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.
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.
Elasticity of demand is equal to one indicates
What are the degrees of price 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 |
Assertion (A) : A change in quantity demanded of one commodity due to a change in the price of other commodity is cross elasticity.
Reasoning (R) : Changes in consumers income leads to a change in the quantity demanded.
mention any two examples of composite demand.
Explain the concept of price elasticity of demand.
The elasticity of demand for school bag will be ______.
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?
What is meant by elastic demand?
What is unit elasticity of demand?
