{"id":2061,"date":"2019-07-30T05:44:27","date_gmt":"2019-07-30T05:44:27","guid":{"rendered":"https:\/\/commerceiets.com\/?p=2061"},"modified":"2019-07-30T05:44:27","modified_gmt":"2019-07-30T05:44:27","slug":"elasticity-of-demand","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/elasticity-of-demand\/","title":{"rendered":"ELASTICITY OF DEMAND"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_69_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/elasticity-of-demand\/#MEANING\" title=\"MEANING\">MEANING<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/elasticity-of-demand\/#TYPES_OF_ELASTICITY_OF_DEMAND\" title=\"TYPES OF ELASTICITY OF DEMAND\">TYPES OF ELASTICITY OF DEMAND<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/elasticity-of-demand\/#PRICE_ELASTICITY_OF_DEMAND\" title=\"PRICE ELASTICITY OF DEMAND\">PRICE ELASTICITY OF DEMAND<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/commerceiets.com\/elasticity-of-demand\/#INCOME_ELASTICITY_OF_DEMAND\" title=\"INCOME ELASTICITY OF DEMAND\">INCOME ELASTICITY OF DEMAND<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/commerceiets.com\/elasticity-of-demand\/#CROSS_ELASTICITY_OF_DEMAND\" title=\"CROSS ELASTICITY OF DEMAND\">CROSS ELASTICITY OF DEMAND<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1 class=\"has-text-align-center wp-block-heading\" id=\"meaning\"><span class=\"ez-toc-section\" id=\"MEANING\"><\/span>MEANING<span class=\"ez-toc-section-end\"><\/span><\/h1>\n\n\n\n<p>Elasticity of <a aria-label=\"Demand (opens in a new tab)\" href=\"https:\/\/commerceiets.com\/demand\/\" target=\"_blank\" rel=\"noreferrer noopener\">Demand<\/a> 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.<\/p>\n\n\n\n<p class=\"has-light-green-cyan-background-color has-background has-medium-font-size\"><strong>ACCORDING TO PROF. DOOLEY<\/strong><\/p>\n\n\n\n<p class=\"has-medium-font-size\">\u201cThe elasticity of demand measures the responsiveness of\nquantity demanded of a good to change in its price, price of other goods and\nchange in consumer\u2019s income.\u201d<\/p>\n\n\n\n<p class=\"has-medium-font-size\">Thus, the measure of the proportion of change in demand due to given change in factors affecting demand is known as Elasticities of demand.<\/p>\n\n\n\n<p>Demand is that specific quantity of a commodity which the consumer purchases at a specific price during a specified time period.<\/p>\n\n\n\n<p class=\"has-luminous-vivid-amber-background-color has-background\"><strong>ACCORDING TO FERGUSON<\/strong><\/p>\n\n\n\n<p>\u201cDemand refers to the quantities of commodity that the\nconsumers are able and willing to purchase at each possible price during a\nperiod of time, other things being equal.\u201d<\/p>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\" id=\"types-of-elasticity-of-demand\"><span class=\"ez-toc-section\" id=\"TYPES_OF_ELASTICITY_OF_DEMAND\"><\/span>TYPES OF ELASTICITY OF DEMAND<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"has-medium-font-size\">There are basically three types of Elasticites of Demand:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Price Elasticity of Demand<\/li><li>Income Elasticity of Demand<\/li><li>Cross Elasticity of Demand<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"price-elasticity-of-demand\"><span class=\"ez-toc-section\" id=\"PRICE_ELASTICITY_OF_DEMAND\"><\/span>PRICE ELASTICITY OF DEMAND<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">It 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.<\/p>\n\n\n\n<p class=\"has-very-light-gray-background-color has-background has-medium-font-size\"><strong>E<\/strong><sub><strong>d<\/strong><\/sub><strong>= (-) (% change in quantity demanded)\/ (% change in price)<\/strong><\/p>\n\n\n\n<p class=\"has-light-green-cyan-background-color has-background has-medium-font-size\"><strong>ACCORDING TO BOULDING<\/strong><\/p>\n\n\n\n<p class=\"has-medium-font-size\">\u201cIt measures the responsiveness of the quantity demanded of a good to the change in its price.\u201d<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"income-elasticity-of-demand\"><span class=\"ez-toc-section\" id=\"INCOME_ELASTICITY_OF_DEMAND\"><\/span>INCOME ELASTICITY OF DEMAND<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">It is the degree of responsiveness or sensitiveness of change in quantity demanded to the change in the income of the consumer. It can also be defined as the ratio of proportionate change in the quantity demanded of a good to the proportionate change in income of the consumer.<\/p>\n\n\n\n<p class=\"has-very-light-gray-background-color has-background has-medium-font-size\"><strong>E<\/strong><sub><strong>y<\/strong><\/sub><strong>= &nbsp;(Proportionate change in quantity demanded)\/ (Proportionate change in the income of consumer)<\/strong><\/p>\n\n\n\n<p class=\"has-medium-font-size\">Income Elasticity is <\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Positive in case of normal goods<\/li><li>Negative in case of inferior or giffen\ngoods<\/li><li>Zero in case of neutral goods like air,\nwater and sunshine etc.<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"cross-elasticity-of-demand\"><span class=\"ez-toc-section\" id=\"CROSS_ELASTICITY_OF_DEMAND\"><\/span>CROSS ELASTICITY OF DEMAND<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-medium-font-size\">It is the degree of responsiveness of change in quantity demanded of \u2018A\u2019 commodity to change in price of related commodity \u2018B\u2019. This type of elasticity is generally found in case of substitute goods.<\/p>\n\n\n\n<p class=\"has-medium-font-size\">It can be defined as ratio of\nproportionate change in the quantity demanded of one good to the proportionate\nchange in the price of another good.<\/p>\n\n\n\n<p class=\"has-very-light-gray-background-color has-background has-medium-font-size\"><strong>E<\/strong><sub><strong>c<\/strong><\/sub><strong>= &nbsp;(Proportionate change in the quantity demanded of &#8216;A&#8217; good)\/ (Proportionate change in price of &#8216;B&#8217; good)<\/strong><\/p>\n\n\n\n<p class=\"has-medium-font-size\">Cross Elasticity is: <\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Positive in case of substitute goods<\/li><li>Negative in case of Complementary Goods<\/li><li>Zero in case of Independent goods. <\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/demand\/\">Theory of Demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-demand\/\">Law of Demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/demand-function\/\">Demand Function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/exceptions-of-law-of-demand\/\">Exceptions of law of demand<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/elasticity-of-demand\/\">Elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/change-in-demand\/\">Change in demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/price-elasticity-of-demand\/\">Price elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-law-of-demand-and-elasticity-of-demand\/\">Law of demand Vs Elasticity of demand<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/factors-affecting-price-elasticity-of-demand\/\">Factors affecting price elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/production-function\/\">Production function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-short-run-long-run-production-function\/\">Short run vs long run production function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-variable-proportions\/\">Law of variable proportions<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/types-of-demand\/\">Types of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/managerial-economics\/\">Managerial economics<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/characteristics-of-managerial-economics\/\">Characteristics of managerial economics<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-managerial-economics\/\">Scope of managerial economics<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/utility-analysis\/\">Utility analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-diminishing-marginal-utility\/\">Law of diminishing marginal utility<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-equi-marginal-utility\/\">Law of equi marginal utility<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/consumer-equilibrium\/\">Consumers Equilibrium<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/indifference-curve-analysis\/\">Indifference curve analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/consumer-equilibrium-using-indifference-curve-analysis\/\">Consumer equilibrium using indifference curve analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/relationship-between-tp-ap-and-mp\/\">Relationship between TP, AP and MP<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-increasing-returns\/\">Law of increasing returns<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/law-of-diminishing-returns\/\">Law of diminishing returns<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-constant-returns\/\">Law of constant returns<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/returns-to-scale\/\">Returns to Scale<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/economies-and-diseconomies-of-scale\/\">Economies and diseconomies of scale<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/concept-of-costs\/\">Concept of costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/relationship-between-ac-and-mc\/\">Relationship between AC and MC<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/traditional-theory-of-cost\/\">Traditional theory of costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/modern-theory-of-cost\/\">Modern theory of costs<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/explicit-vs-implicit-costs\/\">Explicit vs Implicit costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/revenue\/\">Revenue<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perfect-competition\/\">Perfect competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopoly-meaning\/\">Monopoly<\/a>&nbsp;<\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/price-discrimination\/\">Price discrimination<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-perfect-competition-and-monopoly\/\">Difference between perfect competition and monopoly<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perfect-and-monopolistic-competition\/\">Perfect Vs Monopolistic competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopoly-and-monopolistic-competition\/\">Monopoly and monopolistic competition<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/product-differentiation-strategy\/\">Product differentiation strategy<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopolistic-competition\/\">Monopolistic competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/national-income-in-india\/\">National Income in India<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/measurement-of-national-income\/\">Measurement of national income in India<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/consumption-function\/\">Consumption function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/keynesian-psychological-law-of-consumption\/\">Keynes Psychological law of consumption<\/a><\/td><td><\/td><td><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"266\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1024x266.jpg\" alt=\"Elasticity of demand\" class=\"wp-image-787\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1024x266.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-300x78.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-768x199.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1536x398.jpg 1536w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize.jpg 1920w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption>Elasticity of demand<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>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 \u201cThe elasticity of demand measures the responsiveness of quantity demanded of a&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/elasticity-of-demand\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;ELASTICITY OF DEMAND&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":2071,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[92],"tags":[94],"class_list":["post-2061","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-micro-economics","tag-demand"],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/2061"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=2061"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/2061\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/2071"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=2061"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=2061"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=2061"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}