Economics
Share
Your study cart is empty!
Used as a measure of the responsiveness of demand to changes in the commodities of price.
Types of Price elasticity
If ep=0; the demand is perfectly inelastic
If ep=1; the demand has unitary elastic
If ep=∞; the demand is perfectly elastic
If 0<e<1; the demand is inelastic
If 1<e<∞; the demand is elastic
It is defined as the proportionate change in the quantity demanded resulting from a proportionate change in income.
Ey= dQ/dY X Y/Q
It is defined as the proportionate change in the quantity demanded of ‘X’ resulting from a proportionate change in the price of ‘Y”.
Exy=dQx/dPy. Py/Qx
There are basically four ways by which we can measure price elasticity of demand. These methods are
- Percentage method
- Total outlay method
- Point method
- Arc method
Developed by Versioning Solutions.