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Answer the Following Question : Explain the Importance of Concept of Elasticity of Demand for International Trade. - Economics

Short Note

Answer the following question :

Explain the importance of concept of Elasticity of Demand for international trade.

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Solution

In international trade, the concept of elasticity of demand plays an important role. This concept proves helpful in determining the norms that would prove beneficial for international trade. For instance, based on the elasticity of the commodities that are exported, the country can decide on the price that is to be charged. For exports that have inelastic demand, higher price can be charged. Similarly, the concept can be used to formulate export and import policies in a better manner.

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 2 | Page 32
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