Distinguish Between
Distinguish between Relatively elastic demand and relatively inelastic demand.
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Solution
Relatively elastic demand
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Relatively inelastic demand
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In this case, the change in price leads to a proportionately large change in the quantity demanded.
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In this case, the change in price leads to a proportionately less change in the quantity demanded.
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It represents a flatter demand curve.
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It represents a steeper demand curve.
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Symbolically it is represented as Ed > 1
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Symbolically it is represented as Ed < 1
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For example - 50% fall in price leads to 100% rise in quantity demanded.
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For example - 50% fall in price leads to 25% rise in quantity demanded.
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Concept: Importance of Price Elasticity of Demand
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