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Before understanding the difference between Law of Demand vs Elasticity of Demand, both concepts should be clear: LAW OF DEMAND Law of demand explains the relationship between price of the commodity and its demand. The law states that there is inverse or negative relationship between the demand and price of the commodity, ceteris paribus i.e….
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MEANING Price Elasticity of demand is the rate at which quantity purchased changes with the change in price. It is the ratio of percentage change in quantity demanded to percentage change in the price of the commodity, other factors remaining the same. Ed= (-) Percentage change in quantity demanded/ Percentage change in price ACCORDING TO…
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CHANGE IN DEMAND Change in demand which is also known as variations in demand means the change in the quantity demanded of the commodity due to the various factors like price of own commodity, price of related goods, income of consumer, taxation policy of government, tastes and preferences of the consumers etc. Change in Demand…
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MEANING Elasticity of Demand measures the extent to which quantity demanded of a commodity increases or decreases in response to increase or decrease in its price, the price of related goods or a change in the income of consumer. ACCORDING TO PROF. DOOLEY “The elasticity of demand measures the responsiveness of quantity demanded of a…
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EXCEPTIONS OF LAW OF DEMAND Demand is that specific quantity of a commodity which the consumer purchases at a specific price during a specified time period. ACCORDING TO FERGUSON “Demand refers to the quantities of commodity that the consumers are able and willing to purchase at each possible price during a period of time, other…
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LAW OF DEMAND Law of demand explains the relationship between price of the commodity and its demand. The law states that there is inverse or negative relationship between the demand and price of the commodity, ceteris paribus i.e. other things being constant. It means if the price of the commodity increases, the demand for commodity…
