State the name of methods to measure price elasticity of demands
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The elasticity of demand refers to the responsiveness of the demand due to the change in the determinants of the demand. There are three types of elasticity of demand viz. price elasticity of demand, the income elasticity of demand and cross elasticity of demand. Here, we shall discuss the price elasticity ofPrice elasticity of demand measures the relationship between the proportionate change in demand and the proportionate change in price.
In other words, it shows how much change in price will cause how much change in demand. The formula to calculate the price elasticity of demand is:
E
P
=
Proportionate change in Demand
Proportionate change in Price
=
d
q
d
p
x
p
q
Explanation:
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