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# Elasticity of demand

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### Elasticity of demand

1. 1. PRESENTATION BY: PRACHI MITTAL
2. 2.  Elasticityof demand is defined as the responsiveness of the quantity of a good to changes in one of the variables on which demand depends- Price of the commodity Income of the Consumer Various other factorDEFINATION-’’The elasticity of demand measures the response of the demand for the commodity to change in price”.
3. 3.  Itexpress the response of quantity demanded of a good to a change in its price Price elasticity of demand called Elasticity of demand as, price is the most important determinant of demand.
4. 4.  The degree of responsiveness of the demand for the commodity to a change in the income of the consumer. It is defined as Ratio of percentage change in the quantity demanded of a commodity to the percentage change in the income of consumer
5. 5.  The degree of responsiveness in the demand for one good to the change in the price of the other good (Substitute or complement) It is as changed in the price of one good causes a change in the quantity of the other good.
6. 6.  Elasticityat different points on a demand curve is different. There are demand curve which have the same elasticity through out their length. Perfectly Elastic Demand curve Perfectly Inelastic Demand curve Unitary Elastic Demand Curve
7. 7.  Horizontal straight line demand curve Demand may increase or decrease to any extent irrespective of no change in the price.
8. 8.  Vertical Straight line demand curve There will be no change in demand take place due to change in its price. Elasticity of demand is Zero
9. 9.  It is a Rectangular hyperbolic demand curve When change in price brings about exactly proportionate change in the quantity demanded. It means (price*quantity) does not change with the change in price.
10. 10.  NATURE OF THE COMMODITY Necessities and prestige NUMBER OF SUBSITUTES Tea city to- Brook bond tea NUMBER OF USES OF A COMMODITY Electricity- Heating, cooking, Lighting JOINT DEMAND Petrol and car
11. 11.  POSITOIN OF COMMODITY IN THE CONSUMER’S BUDJET Salt, Soap, Ink URGENCY Medicines CONSUMER’S BEHAVIOUR Tobacco, Alcohol, Drugs
12. 12. THANK YOU