Advertisements
Advertisements
Question
Explain the different types of price elasticity of demand.
Advertisements
Solution
Degrees of Price Elasticity of Demand
- Perfectly Elastic Demand (Ed = ∞): When the demand for a commodity rises or falls at a particular price or becomes zero with a slight rise in price, the demand for that commodity is said to be perfectly elastic (Ed = ∞)
- Perfectly Inelastic Demand (Ed = 0): When demand remains constant and does not change with change in price, the demand is known as perfectly inelastic.
- Highly Elastic Demand (Ed > 1): When % change in quantity demanded > % change in price, it is called highly elastic demand.
- Inelastic Demand (Ed < 1): When the percentage change in quantity demanded for a commodity is less than the percentage change in its price, it is called highly inelastic demand.
- Unit Elastic Demand (Ed = 1): When percentage change in demand for a commodity is equal to percentage change in price, it is termed as unit elastic demand.
APPEARS IN
RELATED QUESTIONS
Analyse the given graphs and identify the type of elasticity of demand of:
- Picture 1
- Picture 2
A product's demand is ______ when the time period under consideration is longer.
Mention the degree of price elasticity of demand for the following goods:
School uniform
Indicate the degree of elasticity demand of the following demand curves.
When is the demand of a commodity said to be inelastic?
When is the demand for a commodity said to be perfectly inelastic?
Define perfectly elastic demand.
What is the price elasticity of demand for the following demand curve?
Straight line demand curve parallel to Y-axis.
State whether the price elasticity of demand is inelastic, relatively elastic, highly elastic or highly inelastic. Give reasons to support your answer.
demand for refrigerators
State whether the price elasticity of demand is inelastic, relatively elastic, highly elastic or highly inelastic. Give reasons to support your answer.
Demand for diesel and petrol
