ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Elastic is a term used in economics to describe a change in the behavior of buyers and sellers in response to a change in price for a good or service. In other words, demand elasticity or inelasticity for a product or good is determined by how much demand for the product changes as the price increases or decreases.

Detailed explanation-2: -It is a measure of how sensitive, or responsive, consumers are to a change in price. For any given good or service, the price elasticity of demand measures how much the quantity demanded by consumers responds to a change in the price of that good or service.

Detailed explanation-3: -Economists describe the way that consumers respond to price changes as elasticity of demand. This elasticity of demand shows how drastically buyers will cut back or increase their demand for a good when the price rises or falls.

Detailed explanation-4: -Elasticity of demand explains the degree of responsiveness of demand to change in price-this is the only correct statement among the following since elasticity of demand is calculated by dividing the proportionate change in quantity demanded by the proportionate change in price. Was this answer helpful?

Detailed explanation-5: -An elastic demand is one in which the change in quantity demanded due to a change in price is large. An inelastic demand is one in which the change in quantity demanded due to a change in price is small. The formula for computing elasticity of demand is: (Q1 – Q2) / (Q1 + Q2)