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8 Feb 2020

What is meant by Price elasticity of demand? Explain the following with respect to price  elasticity of demand:

 

a) Luxuries of life often exhibit low elasticity of demand.

 

b) Greater the alternative uses of a commodity, lesser is the elasticity of demand.

 

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Casey Durgan
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8 Feb 2020

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Related questions

14. a) What is meant by the price elasticity of demand? List and explain three factors of price elasticity of demand.

      b) Why managers are interested in the concept of price elasticity of demand? Illustrate with examples.

 

Which of the following statements about the absolute value of the price elasticity of demand is correct?

A) The price elasticity of demand for laundry detergent, in general, is likely to be greater than the price elasticity of demand for Gain laundry detergent.

B) The price elasticity of demand for Gain laundry detergent is greater than the price elasticity of demand for laundry detergent in general.

C) The price elasticity of demand for gasoline is greater than the price elasticity of demand for cereal because more people eat cereal than use gasoline.

D) The price elasticity of demand for gasoline is less than the price elasticity of demand for cereal because more people eat cereal than use gasoline.

1.Explain the term Price Elasticity of Demand. When a firm raises the price of a commodity from $10 to $20, the quantity demanded falls from 10 units to 2. Calculate the price elasticity of demand using the average price method.

2. What is the Cross Price Elasticity of Demand? Explain how it helps identify complements and substitutes?

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