ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Demand is almost always more elastic at higher prices and less elastic at lower prices. Economists do not usually differentiate between short run and long run when estimating elasticity. Elasticity of demand cannot be estimated. When calculating elasticity you do not need to focus on how output price is measured.

Detailed explanation-2: -Many factors determine the demand elasticity for a product, including price levels, the type of product or service, income levels, and the availability of any potential substitutes. High-priced products often are highly elastic because, if prices fall, consumers are likely to buy at a lower price.

Detailed explanation-3: -Demand tends to be elastic at high prices and inelastic at low prices. In the range of prices in which demand is elastic, total revenue will diminish as price decreases. If the relative change in price is greater than the relative change in the quantity demanded associated with it, demand is inelastic.

Detailed explanation-4: -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. If the formula creates an absolute value greater than 1, the demand is elastic.

Detailed explanation-5: -Price Elasticity of Demand (PED) is an economic tool that measures the change in quantity demanded of a product when there is a fluctuation in its price. If this formula gives a number greater than 1, the demand is elastic. In other words, quantity changes faster than price.