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INDIAN ECONOMICSINDIAN ECONOMICS
PGDM 2DINKER VAID
Elasticity Of DemandElasticity Of Demand
The elasticity of demand is a degree of The elasticity of demand is a degree of change in the change in the quantity demanded quantity demanded of a of a product in response to its product in response to its determinantsdeterminants, , such as -:such as -:
price of the product,price of the product, price of substitutes, and price of substitutes, and income of consumersincome of consumers
Types of Elasticity of Types of Elasticity of DemandDemand
Price Elasticity of Price Elasticity of DemandDemand
Types Of Price Types Of Price ElasticityElasticity
Income Elasticity of Income Elasticity of DemandDemand
Types of Types of Income Income Elasticity of DemandElasticity of Demand
Positive income Positive income elasticity of demandelasticity of demand
When a proportionate change in When a proportionate change in the income of a consumer, the income of a consumer, increases the demand for a increases the demand for a product . product .
vice versa, income elasticity of vice versa, income elasticity of demand is said to be negative. demand is said to be negative.
Negative income Negative income elasticity of demandelasticity of demand
When a proportionate change in When a proportionate change in the income of a consumer results the income of a consumer results in a fall in the demand for a in a fall in the demand for a product product
vice versa, the income elasticity vice versa, the income elasticity of demand is said to be positive. of demand is said to be positive.
Zero income Zero income elasticity of demandelasticity of demand
When a proportionate change in When a proportionate change in the income of a consumer does the income of a consumer does not bring any change in the not bring any change in the demand for a product Than, demand for a product Than, income elasticity of demand is income elasticity of demand is said to be zero. said to be zero.
Cross elasticity of Cross elasticity of demand demand
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