ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Demand elasticity is the extent to which a change in price causes a change in the quantity demanded. Demand is elastic when a change in price causes a relatively larger change in quantity demanded. Demand is inelastic when a change in price causes a relatively smaller change in quantity demanded.

Detailed explanation-2: -If the percentage change in quantity demanded is greater than the percentage change in price, demand is said to be price elastic, or very responsive to price changes.

Detailed explanation-3: -If the price goes up, the quantity demanded goes down (but demand itself stays the same). If the price decreases, quantity demanded increases. This is the Law of Demand. On a graph, an inverse relationship is represented by a downward sloping line from left to right.

Detailed explanation-4: -A change in quantity demanded refers to a change in the specific quantity of a product that buyers are willing and able to buy. This change in quantity demanded is caused by a change in the price.

Detailed explanation-5: -Price elasticity of demand is a measurement of the change in the consumption of a product in relation to a change in its price. Expressed mathematically, it is: Price Elasticity of Demand = Percentage Change in Quantity Demanded ÷ Percentage Change in Price.