Question

3. Explain Law of Diminishing marginal ? Explain.Assumptions?
4. What is increase in Demand and Decrease in Demand ?
5. Factors affecting Elasticity of Demand ?​

Answer 1

Answer:

3. 1) It is assumed that the unit of the consumer good is a standard one. 2) It is assumed that utility is measurable and can be expressed in quantitative terms. 3) The consumer's tastes and preferences remain same during the period of consumption. 4)There must be continuity in the consumption.

4. Decrease in Demand. (a) Increase in demand refers to a rise in demand due to changes in other factors, price remaining constant. (a) Decrease in demand refers to fall in demand due to changes in other factors, price remaining constant.

5. Various factors which affect the elasticity of demand of a commodity are:

Nature of commodity:

Availability of substitutes:

Income Level:

Level of price:

Postponement of Consumption:

Number of Uses:

Share in Total Expenditure:

Time Period:

Explanation:

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