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Answer the Following Question : Explain the Concept of Elasticity of Demand - Economics

Short Note

Answer the following question :

Explain the concept of Elasticity of Demand

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Solution

The word ‘elasticity’ means flexibility or responsiveness. Accordingly, elasticity of demand refers to the responsiveness of demand to the change in various determining factors. We know that the demand for a good depends on a number of factors such as its price, income, tastes, preferences and the price of related goods. Thus, elasticity of demand helps in estimating the change in demand that results from the change in one or more of these factors.

Concept: Importance of Price Elasticity of Demand
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APPEARS IN

Micheal Vaz Economics HSC 12th Standard Maharashtra State Board
Chapter 4 Elasticity of Demand
Exercise | Q 1 | Page 32
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