Question

Explain the concept of elasticity of demand with its application.

Answer 1

elasticity of demand refers to %,change in demand for a commodity with respect to % change in any of the factor affecting demand for that commodity.
there are three type of elasticity of demand
1. price elsty of Demand : change[∆] in QD due to ∆P(price)
%∆QD due to % ∆p
2.cross elsty of D:%∆QD due to % ∆p of related goods
3. income elsty D
there are two method of price elasticity of demand
1.% method:%∆QD due to %∆P
2.proportion method: ped=%,∆QD upon % ∆ P
degree of price elsty of demand
1.perfectly elsty demand: ∆QD due to ∆ P
2.perfectly elasticity Demand: thete is no ∆ in QD due to ∆P
3. more elsty demand: %∆QD is higher than %∆p
4. less elsty demand: %∆QD is <℅∆P


I hope it well help you...

Answer 2

Here is ur ans..........