Understanding Elasticity of Demand in Microeconomics
Explore the concept of price elasticity of demand along with its types, income elasticity of demand, classification of goods based on income elasticity, cross-price elasticity of demand, and the differences between substitute and complementary goods. Enhance your knowledge in microeconomics with this informative content.
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COURSE: B.Sc. (PROGRAMME) IN ECONOMICS PAPER NAME MICROECONOMICS-I TOPIC ELASTICITY OF DEMAND YEAR- FIRST SEMESTER-1 SESSION -2020-2021 DATE OF LECTURE: 15/01/2021 PREPARED BY DR. KAMALIKA CHAKRABORTY ASSISTANT PROFESSOR (DEPARTMENT OF ECONOMICS) KHATRA ADIBASI MAHAVIDYALAYA, BANKURA, WEST BENGAL
Price Elasticity of Demand Price Elasticity of demand measures the percentage change in quantity demanded of a good due to one percentage change in its price.
TYPES OF PRICE ELASTICITY OF DEMAND Perfectly Elastic Demand Perfectly Inelastic Demand Relatively Elastic Demand Relatively Inelastic Demand Unitary Elastic Demand
Income Elasticity of Demand Income elasticity of demand refers to the percentage change in quantity demanded of a good due to one percentage change in income of the consumer.
Classification of goods on the basis of value of Income Elasticity of Demand 1) Normal goods ( a) Necessary goods ( b) Luxury goods ( >0) 0< > 1) <1) 2) Inferior goods ( <0)
Cross price Elasticity of Demand Cross price elasticity of demand refers to the percentage change in quantity demanded of a good due to one percentage change in price of the related good. Related good may be a substitute good or complementary good.
SUBSTITUTE GOODS VERSUS COMPLEMENTARY GOODS Substitute goods Ec >0 Complementary goods Ec < 0
