Friday, July 20, 2018

Price elasticity of demand


Price elasticity of demand is the effect of price on the demand of any commodity. Both of the things are inversly proportional to each other . If there is fall in price demand will increase and if the price of a commodity increase its demand gradually decreases. Keeping all the external factors remains the same. It is the change in quantity demanded to the change in price.
It is exceptional for few products such as sugar ,salt ,rice because there is no replacement for these necessary goods.
 Formula for price elasticity of demand (Ed) is

           Ed =∆Q/Q ÷ ∆P/ P
Where Q is quantity .
          ∆Q is change in quantity.
            P is price.
          ∆P is change in price.
By at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)

IMPACT OF SOCIETY /SOCIAL GROUPS ON PURCHASE INTENTIONS OF HOME BUYING- Consumers are the most important factor that will make any bus...

  • Supply in elasticity
    Supply in elastic:if the supply is difficult to replace the product by a substitute goods then that is known as supply-in-elastic. Example...
  • Supply Elasticity
    If the supply is easy to replace by multiple suppliers then it’s known as supply elasticity. Any unskilled worker is an example of supply e...
  • NO PROFIT WITHOUT MARKET STRUCTURE
    MARKET STRUCTURE: there are different market structures that can be characterized to an economy, without market structure any company ca...