7 Distinguish between the following:
(1) Relatively Elastic Demand and Relatively inelastic Demand :
Answers
Answer:
Demand for a good is relatively inelastic if the PED coefficient is less than one (in absolute value). Demand for a good is relatively elastic if the PED coefficient is greater than one (in absolute value).
Explanation:
When the percentage change in quantity demanded is greater than the percentage change in price, the demand is said to be elastic. Or. In other words, relatively small changes in price cause relatively large changes in quantity
Relatively inelastic demand is one when the percentage change produced in demand is less than the percentage change in the price of a product. For example, if the price of a product increases by 30% and the demand for the product decreases only by 10%, then the demand would be called relatively inelastic.
Answer:
Demand for a good is relatively inelastic if the PED coefficient is less than one (in absolute value). Demand for a good is relatively elastic if the PED coefficient is greater than one (in absolute value).