Elasticities of demand
Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
seminar surveyer
Active In SP
**

Posts: 3,541
Joined: Sep 2010
#1
14-01-2011, 04:12 PM





.ppt   Elasticities of demand.ppt (Size: 404.5 KB / Downloads: 65)

Group Members
Sonali Gupta
Subhra Prova Roy
Saikat Mondal



ELASTICITIES OF DEMAND

Managerial point of view, however, the knowledge of nature of relationship alone is not sufficient. What is more important is the extent of relationship or the degree of responsiveness of demand to the changes in its determinants. The degree of responsiveness of demand to the change in it determinants is called elasticity of demand.

CONCEPT OF ELASTICITY

Elasticity is the percentage change in one variable in response to a one percent change in another variable.

WHY WE USE ELASTICITY

The demand of a good depends not only on its price, but also on consumer income and on the prices of other goods.
For example, if the price of tea increases, the quantity demanded will fall.
Often, however, we want to know how the quantity demand will rise or fall. How sensitive is the demand or tea to its price?
If price increases by 10%, how much the will the quantity demanded change?
How much will it change if the income rises by 10%?

WE USE ELASTICITIES TO ANSWER QUESTION LIKE THESE.

TYPES OF ELASTICITY
Price elasticity of demand
Income elasticity of demand
Cross price elasticity of demand
Promotional or advertising elasticity of
demand

Price elasticity of demand
Price elasticity of demand measures the percentage change in quantity demanded due to one percent change in price of the good ,other variables remaining constant

Measurement of price elasticity
Percentage method
Total outlay method
Point method
Arc method

Percentage method
According to this method elasticity of demand is the ratio of percentage (or proportionate) change in quantity demanded to percentage (or proportionate) change in price

Total outlay method
This method helps to know whether elasticity of demand is equal to one, greater than one,or less than one
Elasticity one: if the rise or fall in price keeps the total outlay unaffected
Elasticity is more than one: if fall in price leads to increase in total outlay, while rise in price reduces total outlay
Elasticity is less than one: if fall in price reduces total outlay, while rise in
price increases total outlay







Reply
seminar ideas
Super Moderator
******

Posts: 10,003
Joined: Apr 2012
#2
25-04-2012, 12:52 PM

Elasticities of demand


.pptx   varma econ.pptx (Size: 125.53 KB / Downloads: 22)


Alford Marshall developed the concept of elasticity of demand which measures the responsiveness of quantity demanded to changes in price.
To be more precise, elasticity of demand is defined as “the relative change in the quantity demanded to the relative change in the price”.

Types of elasticity of demand

There are three types of elasticity of demand
Price of elasticity of demand
Income elasticity of demand
Cross elasticity of demand


Price elasticity of demand (Ed)

This shows the responsiveness of quantity demanded of a commodity, when price of that commodity changes, with other factors being constant.


Cross elasticity of demand (Exy)


Demand of one good (X) is also influenced by the price of other related good(Y). These may be substitute or complement. It is the ratio of percentage change in quantity demanded of commodity (X) and percentage change in price of related commodity (Y).


Perfectly inelastic demand

It is situation in which change in price of a commodity leaves the demand unaffected. The price of the commodity may increase or decrease, but the quantity demanded remains the same.



Reply

Important Note..!

If you are not satisfied with above reply ,..Please

ASK HERE

So that we will collect data for you and will made reply to the request....OR try below "QUICK REPLY" box to add a reply to this page

Quick Reply
Message
Type your reply to this message here.


Image Verification
Please enter the text contained within the image into the text box below it. This process is used to prevent automated spam bots.
Image Verification
(case insensitive)

Possibly Related Threads...
Thread Author Replies Views Last Post
  Supply and Demand ppt seminar projects maker 0 181 25-09-2013, 02:41 PM
Last Post: seminar projects maker
  Liquidity risk, liquidity demand of investors and asset pricing study tips 0 269 31-05-2013, 02:50 PM
Last Post: study tips
  Driving demand with wireless technology study tips 0 245 15-05-2013, 03:07 PM
Last Post: study tips
  Theory of Demand PPT study tips 0 336 27-02-2013, 09:29 AM
Last Post: study tips
  Elasticity and Demand PPT study tips 0 292 13-02-2013, 09:59 AM
Last Post: study tips
  DEMAND ANALYSIS PPT project girl 0 323 31-01-2013, 11:14 AM
Last Post: project girl
  Demand and Supply And Law of Demand and Supply Report project girl 0 230 25-01-2013, 11:52 AM
Last Post: project girl
  The Different Types of Demand project girl 0 300 14-12-2012, 06:48 PM
Last Post: project girl
  Supply and Demand seminar tips 0 271 13-12-2012, 03:17 PM
Last Post: seminar tips
  ELASTICITY OF DEMAND seminar tips 1 549 12-12-2012, 12:42 PM
Last Post: project girl