ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The proportion to which the quantity demanded changes with respect to price is called elasticity of demand. A good or service that is highly elastic means the quantity demanded varies widely at different price points.

Detailed explanation-2: -Price elasticity of demand is the ratio of the percentage change in quantity demanded of a product to the percentage change in price. Economists employ it to understand how supply and demand change when a product’s price changes.

Detailed explanation-3: -equilibrium price the price in a market at which the quantity demanded and the quantity supplied of a good are equal to one another; this is also called the “market clearing price.”

Detailed explanation-4: -Demand Function. A demand function is defined by p=f(x), p = f ( x ), where p measures the unit price and x measures the number of units of the commodity in question, and is generally characterized as a decreasing function of x; that is, p=f(x) p = f ( x ) decreases as x increases.

Detailed explanation-5: -Excess Demand: the quantity demanded is greater than the quantity supplied at the given price. This is also called a shortage.