CHAPTER
Elasticity of Demand
,Elasticity of Demand
Law of demand –
Doe not tell how much of change in
quantity demanded due to change in
price
,Elasticity of Demand
Refers to percentage change in demand
for a commodity with respect to
percentage change in any of the factors
affecting demand.
E= percentage change in demand /
percentage change in a factors
affecting demand.
, 3 Dimensions of Elasticity of Demand
Elasticity of Demand
Price Elasticity Income
Cross Elasticity Elasticity of
of demand
of demand demand
Elasticity of Demand
,Elasticity of Demand
Law of demand –
Doe not tell how much of change in
quantity demanded due to change in
price
,Elasticity of Demand
Refers to percentage change in demand
for a commodity with respect to
percentage change in any of the factors
affecting demand.
E= percentage change in demand /
percentage change in a factors
affecting demand.
, 3 Dimensions of Elasticity of Demand
Elasticity of Demand
Price Elasticity Income
Cross Elasticity Elasticity of
of demand
of demand demand