Elasticity of Demand By Jerry Jose PGD(BA)
Ceteris- paribus <ul><li>It is a Latin term which means that …. </li></ul><ul><li>Except Demand and price all other things...
What is Elasticity ? <ul><li>Elasticity is a tool that  measures the responsiveness of the   quantity demanded of a good t...
Kinds of Elasticity…. <ul><li>Price Elasticity of Demand </li></ul><ul><li>Cross-Price Elasticity of Demand </li></ul><ul>...
Perfect Inelastic Demand…. <ul><li>No Matter what the price of the good is the demand will be the same   </li></ul>
Examples….. Salt.
Perfect Elastic Demand…. <ul><li>A fractional change in the price may bring about huge change in the Quantity of demand. <...
Examples…. Soap. Wada pav Tea & Coffee
Unitary Elasticity… <ul><li>Inverse change in Qty. demand on price will be proportional if price increases. </li></ul>
Example…. Fruits & vegetables
Relative Elastic Demand…. <ul><li>When importance of any commodity is understood the necessity is also there.  </li></ul>
Example…. Vaccination Medicines Cure for AIDS
Relatively Inelastic Demand…. Phenomenal change in price will not make change in demand.
Examples…
How to calculate Elasticity ? <ul><ul><li>Percentage change in quantity demanded </li></ul></ul><ul><ul><li>=  -----------...
<ul><li>Q & A </li></ul>
Thank You !!!
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Basics of Economics ...

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Basics of Economics ...

  1. 1. Elasticity of Demand By Jerry Jose PGD(BA)
  2. 2. Ceteris- paribus <ul><li>It is a Latin term which means that …. </li></ul><ul><li>Except Demand and price all other things like .. Income,Trends,Population,Scarcity,Season etc. will remain the same … </li></ul>
  3. 3. What is Elasticity ? <ul><li>Elasticity is a tool that measures the responsiveness of the quantity demanded of a good to its price . </li></ul>
  4. 4. Kinds of Elasticity…. <ul><li>Price Elasticity of Demand </li></ul><ul><li>Cross-Price Elasticity of Demand </li></ul><ul><li>Income Elasticity of Demand </li></ul>
  5. 5. Perfect Inelastic Demand…. <ul><li>No Matter what the price of the good is the demand will be the same </li></ul>
  6. 6. Examples….. Salt.
  7. 7. Perfect Elastic Demand…. <ul><li>A fractional change in the price may bring about huge change in the Quantity of demand. </li></ul>
  8. 8. Examples…. Soap. Wada pav Tea & Coffee
  9. 9. Unitary Elasticity… <ul><li>Inverse change in Qty. demand on price will be proportional if price increases. </li></ul>
  10. 10. Example…. Fruits & vegetables
  11. 11. Relative Elastic Demand…. <ul><li>When importance of any commodity is understood the necessity is also there. </li></ul>
  12. 12. Example…. Vaccination Medicines Cure for AIDS
  13. 13. Relatively Inelastic Demand…. Phenomenal change in price will not make change in demand.
  14. 14. Examples…
  15. 15. How to calculate Elasticity ? <ul><ul><li>Percentage change in quantity demanded </li></ul></ul><ul><ul><li>= ------------------------------------------- </li></ul></ul><ul><ul><li>Percentage change in price </li></ul></ul>
  16. 16. <ul><li>Q & A </li></ul>
  17. 17. Thank You !!!
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