ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Demand can be classified as elastic, inelastic or unitary. 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.

Detailed explanation-2: -When a small change in price of a product causes a major change in its demand, it is said to be perfectly elastic demand. Perfectly elastic demand means that quantity demanded will increase to infinity when the price decreases, and quantity demanded will decrease to zero when price increases.

Detailed explanation-3: -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.

Detailed explanation-4: -Elastic demand occurs when the price of a good or service affects consumer demand. If the price goes down just a little, consumers will buy a lot more. If prices rise just a bit, they’ll stop buying as much and wait for prices to return to normal.

Detailed explanation-5: -The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price. The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.