# Chapter-6 Elasticity of Demand

DEFINATION OF ELASTICITY OF DEMAND

“The elasticity of demand measures the responsiveness of the quantity demanded of a good, to change in its price, price of other goods and changes in consumer’s income.”

PRICE ELASTICITY OF DEMAND: “The price elasticity of demand is the degree of responsiveness of the demand for a commodity to change in its price.”

INCOME ELASTICITY OF DEMAND: “The Cross elasticity of demand is the degree of responsiveness of the demand for a commodity X to change in its price of commodity Y.”

CROSS ELASTICITY OF DEMAND: “The Cross elasticity of demand is the degree of responsiveness of the demand for a commodity X to change in its price of commodity Y.”

• PERFECTLY ELASTIC DEMAND: “It is a situation where demand for the commodity that is price remains constant. ED=INFINITE.

SCHEDULE:

 PRICE (IN Rs) Demand (in units) 30 200 30 400

• PERFECTLY IN ELASTIC DEMAND: When demand for a commodity remain constant in response to change in price of the commodity. ED=0

SCHEDULE:

 PRICE (IN Rs) Demand (in units) 30 200 40 200

• UNIT ELASTIC DEMAND: When percentage change in demand is equal to percentage change in price, then demand for the commodity is said to be unit elastic. ED=1

SCHEDULE

 PRICE (IN Rs) Demand (in units) 20 100 30 50

• MORE THAN UNIT ELASTIC DEMNAD: When percentage change in demand is more than percentage change in price, the demand is said to be more than unit elastic demand. ED>1

SCHEDULE:

 PRICE (IN Rs) Demand (in units) 20 400 30 100

DEFINATION OF ELASTICITY OF DEMAND

“The elasticity of demand measures the responsiveness of the quantity demanded of a good, to change in its price, price of other goods and changes in consumer’s income.”

PRICE ELASTICITY OF DEMAND: “The price elasticity of demand is the degree of responsiveness of the demand for a commodity to change in its price.”

INCOME ELASTICITY OF DEMAND: “The Cross elasticity of demand is the degree of responsiveness of the demand for a commodity X to change in its price of commodity Y.”

CROSS ELASTICITY OF DEMAND: “The Cross elasticity of demand is the degree of responsiveness of the demand for a commodity X to change in its price of commodity Y.”

• PERFECTLY ELASTIC DEMAND: “It is a situation where demand for the commodity that is price remains constant. ED=INFINITE.

SCHEDULE:

 PRICE (IN Rs) Demand (in units) 30 200 30 400

PERFECTLY IN ELASTIC DEMAND: When demand for a commodity remain constant in response to change in price of the commodity. ED=0

SCHEDULE:

 PRICE (IN Rs) Demand (in units) 30 200 40 200

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