application of elasticity of demand
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Answer:
Cross Price Elasticity of Demand – measures the responsiveness of demand of good X to a change in price of good Y. This is used to measure whether goods are substitutes, complements, or unrelated. Elasticity of Supply – measures the responsiveness of supply to a change in the price.
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Answer:
Elasticity, a measure of how much buyers and sellers respond to changes in market conditions, allows us to analyse supply and demand with greater precision
The price elasticity of demand and its determinants
The law of demand states that a fall in the price of a good raises the quantity demanded. The price elasticity of demand measures how much the quantity demanded responds to a change in price. Demand for a good is said to be elastic if the quantity demanded responds substantially to changes in the price. Demand is said to be inelastic if the quantity demanded responds only slightly to changes in the price.