Business Administration: Law of Demand Elasticity of Demand Types of Price Elasticity Perfectly Inelastic Demand Demand with Unity Elasticity Relative Inelastic demand Relatively more Elastic Demand THEORY of Production

1. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Affiliated Institution of G.G.S.IP.U, Delhi
BBA BE-I 103
Sarita chawla

2. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Law of Demand
The law of demand can be illustrated through a demand curve.
Y D
P1
Price P2
0 Q1 Q2 X

3. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
• The extent to which a good responds to a
price change in called its price elasticity. The
goods which respond more are said to have
higher elasticity and the goods which are less
sensitive to the changes in price are said to be
less elastic.
Elasticity of Demand

4. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Types of Price Elasticity
. Perfectly Elastic Demand
Y
ep = 
Price
X

5. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Perfectly Inelastic Demand
2. Perfectly Inelastic Demand
Y
ep = o
Price
X

6. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Demand with Unity Elasticity
2. Demand with Unity Elasticity
Y a = b
∆p = ∆Q
ep = 1
a
Price b
X
Quantity

7. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Relative Inelastic demand
Y ∆Q<= ∆p
ep = <1.
∆P
Price
∆Q
X
Quantity

8. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
Relatively more Elastic Demand
Y ∆Q> ∆QP
ep = >1
∆P
Price
∆Q
X
Quantity

9. TRINITY INSTITUTE OF PROFESSIONAL STUDIES
Sector – 9, Dwarka Institutional Area, New Delhi-75
• Theory of Production (Short Run& Long Run)
• Law of Diminishing Returns (Law of Variable
Productions)
• Returns to a factor or production with one
variable unit
• Returns to Scale
• Isoquant Curves
• Economies and Diseconomies of Scale
THEORY of Production