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The term elasticity indicates responsiveness of one variable to change in other variable.For e.g.,when variable x responds to change in variable y,variable x is said to be elastic.Likewise,demand is said to be elastic if it responds to change in price. There are three main determinants of demand,they are price of the commodity,income of the consumers,and price of the related goods.Thus,elasticity of demand means responsiveness of demand due to change in price of the commodity,income of the consumer,and price of the related gooods. Or you can say that,it measures the degree of change in the quantity demanded of the commodity in response to a given change in price of the commodity,change in consumer's income or price of the related goods. Accordingly,there are three main type of elasticities of demand: 1. Price elasticity of demand: Price elasticity of demand measures the responsiveness of demand for a commodity due to change in it's price. 2. Income elasticity of demand: It indicates the responsiveness of demand to change in consumer's income.It is the degree of change of demand to a change in consumer's income. 3. Cross elasticity of demand: It refers to change in quantity demanded of commodity x as a result of changes in the price of commodity y. Here, x and y can be either substitute goods or complementary goods).
Cross price elasticity of demand measures the responsiveness in the quantity demand of one good when a change in price takes place in another good. Whereas, income of demand responds to the sensitivity of the quantity demanded for certain product in response to a change in consumer goods. Both concepts address the measurement of change in one respect compared to change in another.
elastic:elasticity is %change in q / %change in ptherefore when quantity responds strongly to price, then it is price elastic
Consumer income Consumer taste Substitutes Compliments Change in expectation Number of consumer
This is unit elastic demand. Elasticity measures how price responds to a given variable (in this case demand). If prices and demand move at the same rate you have unit elastic demand. Mathematically it means the ratio of price change to demand change is 1.
The term elasticity indicates responsiveness of one variable to change in other variable.For e.g.,when variable x responds to change in variable y,variable x is said to be elastic.Likewise,demand is said to be elastic if it responds to change in price. There are three main determinants of demand,they are price of the commodity,income of the consumers,and price of the related goods.Thus,elasticity of demand means responsiveness of demand due to change in price of the commodity,income of the consumer,and price of the related gooods. Or you can say that,it measures the degree of change in the quantity demanded of the commodity in response to a given change in price of the commodity,change in consumer's income or price of the related goods. Accordingly,there are three main type of elasticities of demand: 1. Price elasticity of demand: Price elasticity of demand measures the responsiveness of demand for a commodity due to change in it's price. 2. Income elasticity of demand: It indicates the responsiveness of demand to change in consumer's income.It is the degree of change of demand to a change in consumer's income. 3. Cross elasticity of demand: It refers to change in quantity demanded of commodity x as a result of changes in the price of commodity y. Here, x and y can be either substitute goods or complementary goods).
Cross price elasticity of demand measures the responsiveness in the quantity demand of one good when a change in price takes place in another good. Whereas, income of demand responds to the sensitivity of the quantity demanded for certain product in response to a change in consumer goods. Both concepts address the measurement of change in one respect compared to change in another.
A change in consumer's tastes leads to a shift in the demand curve. A change in price leads to a movement along the demand curve.
elastic:elasticity is %change in q / %change in ptherefore when quantity responds strongly to price, then it is price elastic
Consumer income Consumer taste Substitutes Compliments Change in expectation Number of consumer
This is unit elastic demand. Elasticity measures how price responds to a given variable (in this case demand). If prices and demand move at the same rate you have unit elastic demand. Mathematically it means the ratio of price change to demand change is 1.
If consumer income increases, demand will increase. If income decreases, there is less money to spend, so demand for products that are not necessary will decrease. Consumer tastes influence what products are in demand. This can change over time, so a product that is in high demand may become a low demand product and visa versa.
A change in consumer's tastes leads to a shift in the demand curve. A change in price leads to a movement along the demand curve.
Shift in demand curve is affected by the change in prices of substitutes, change in consumer's behaviour, tastes and income etc.
This occurs when price changes but demand does not change. Consumer buy same quantity despite the change in Price and PED is 0
A good's demand is considered perfectly inelastic when that good's demand does not change, no matter the price set. No matter how big or small the price change is. I would pay any price for air.
A verticle demand curve, where a change in price does not effect quantity.