Advertisements
Advertisements
Question
State whether demand will be Elastic or Inelastic. Give reasons for your answer.
A consumer prefers to postpone the purchase of a car to avail more of year ending discount.
Advertisements
Solution
If a customer waits to buy a car in order to take advantage of greater year-end discounts, the car will have 'elastic demand' because commodities with postponed consumption tend to have elastic demand, meaning that a slight increase in price will force customers to defer their previously planned consumption.
APPEARS IN
RELATED QUESTIONS
Explain any two factors that affect the price elasticity of demand. Give suitable examples.
A 5 percent fall in the price of a good raises its demand from 300 units to 318 units. Calculate its price elasticity of demand.
Write Short note on the following.
Ratio method of measuring price elasticity of demand ?
Choose the correct answer :
Demand of labour is _______
State whether the following statements are TRUE or FALSE :
The demand of foodgrains is inelastic.
The account in which the specific amount is deposited per month regularly is known as ______.
The coefficient of price elasticity of demand for Good X is (−) 0.2. If there is a 5% increase in the price of the good, by what percentage will the quantity demanded for the good fall?
The price of Y falls from ₹ 8 to ₹ 6. The quantity demanded increases from 100 units to 125 units. The price electricity of demand will be ______.
Which statement correctly describes the relationship between postponement and price elasticity?
What effect do habitual consumption patterns have on price elasticity of demand?
