ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Percentage change in quality demanded/Percentage change in income
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Percentage change in quantity demanded/Percentage change in income
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Percentage change in income/Percentage change in quantity demanded
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Percentage change in quantity demanded/Percentage change in price
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Detailed explanation-1: -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 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.
Detailed explanation-3: -Use the demand function for quantity You use the demand formula, Qd = x + yP, to find the demand line algebraically or on a graph. In this equation, Qd represents the number of demanded hats, x represents the quantity and P represents the price of hats in dollars.
Detailed explanation-4: -Elasticity of demand, measured by comparing the ratio of percentage change in the quantity demanded to the percentage change in the price of a commodity, is known as percentage method. It is one of the methods of measuring the elasticity of demand.
Detailed explanation-5: -Income Elasticity of Demand = 25% / 75% Income Elasticity of Demand = 0.33.