ECONOMICS
ELASTICITY OF DEMAND
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Detailed explanation-1: -Income elasticity of demand is an economic measure of how responsive the quantity demanded for a good or service is to a change in income. The formula for calculating income elasticity of demand is the percentage change in quantity demanded divided by the percentage change in income.
Detailed explanation-2: -The formula for the elasticity of demand = Percentage change in quantity/ Percentage change in demand.
Detailed explanation-3: -The price elasticity of demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price. If the quotient is greater than or equal to one, the demand is considered to be elastic. If the value is less than one, demand is considered inelastic.
Detailed explanation-4: -The degree of sensitivity of consumers to a change in price is measured by the concept of price elasticity of demand. Price elasticity formula: Ed = percentage change in Qd / percentage change in Price.
Detailed explanation-5: -In economics, the test used to measure the elasticity of demand is the total revenue test. The total revenue test is used to approximate the price elasticity of demand by dividing the change in the total revenue from a unit change in the price.