ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Definition of the market: A narrow definition of the product tends to result in more elastic demand, because of the availability of close substitutes. Time horizon: The longer the time period, the greater the elasticity, as consumers have more time to adapt and find substitutes.

Detailed explanation-2: -Demand tends to be more elastic in the long rung rather than in the short run, because when prices change consumers often need more time to respond and change their shopping habits.

Detailed explanation-3: -Well, if the percent change in the quantity demanded is greater than the percent change in the price, economists label the demand for the good as elastic. For example, if the price of a good increases by 10 percent and the quantity demanded of that good decreases by 20 percent, that good is said to have elastic demand.

Detailed explanation-4: -If the formula creates an absolute value greater than 1, the demand is elastic. In other words, quantity changes faster than price. If the value is less than 1, demand is inelastic. In other words, quantity changes slower than price.

Detailed explanation-5: -But-since supply and demand are more elastic in the long run-the long-run movements in prices are more muted and quantity adjusts more easily.