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Which of the following elasticity of demand measures a movement along the demand curve rather than a shift in the curve?
- a)Income elasticity of demand
- b)Price elasticity of demand
- c)Substitution elasticity of demand
- d)None of these.
Correct answer is option 'B'. Can you explain this answer?
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Which of the following elasticity of demand measures a movement along ...
Price elasticity of demand
Description:
Movement along a demand curve occurs when the demand of a commodity changes due to change in its own price whereas shift in demand occurs when demand changes due to other factors keeping its own price constant. Price elasticity of demand measures relationship between price and demand of the product and hence it measures movement along demand curve.
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Which of the following elasticity of demand measures a movement along ...
Price Elasticity of Demand: Movement Along the Demand Curve
Price elasticity of demand measures the responsiveness of quantity demanded to a change in price. Specifically, it measures the percentage change in quantity demanded due to a percentage change in price. This measure is important because it helps firms determine the optimal price for their product or service.
Movement Along the Demand Curve: A Change in Price
Price elasticity of demand measures a movement along the demand curve rather than a shift in the curve. This means that it measures the change in quantity demanded due to a change in price, while holding all other factors constant. In other words, it measures how consumers react to a change in price, without any other external factors influencing their decision.
Examples
For example, if the price of apples increases by 10%, and as a result, the quantity demanded decreases by 5%, then the price elasticity of demand is -0.5. This means that the change in price caused a movement along the demand curve, rather than a shift in the curve.
In contrast, if the income of consumers increases, and as a result, they start buying more expensive luxury goods, then this would result in a shift in the demand curve. This would be measured by the income elasticity of demand, rather than the price elasticity of demand.
Conclusion
In conclusion, price elasticity of demand measures the responsiveness of quantity demanded to a change in price, and it measures a movement along the demand curve rather than a shift in the curve. This measure is important for firms to determine the optimal price for their product or service.
Price elasticity of demand measures the responsiveness of quantity demanded to a change in price. Specifically, it measures the percentage change in quantity demanded due to a percentage change in price. This measure is important because it helps firms determine the optimal price for their product or service.
Movement Along the Demand Curve: A Change in Price
Price elasticity of demand measures a movement along the demand curve rather than a shift in the curve. This means that it measures the change in quantity demanded due to a change in price, while holding all other factors constant. In other words, it measures how consumers react to a change in price, without any other external factors influencing their decision.
Examples
For example, if the price of apples increases by 10%, and as a result, the quantity demanded decreases by 5%, then the price elasticity of demand is -0.5. This means that the change in price caused a movement along the demand curve, rather than a shift in the curve.
In contrast, if the income of consumers increases, and as a result, they start buying more expensive luxury goods, then this would result in a shift in the demand curve. This would be measured by the income elasticity of demand, rather than the price elasticity of demand.
Conclusion
In conclusion, price elasticity of demand measures the responsiveness of quantity demanded to a change in price, and it measures a movement along the demand curve rather than a shift in the curve. This measure is important for firms to determine the optimal price for their product or service.
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Which of the following elasticity of demand measures a movement along ...
B) price elasticity of demand because it is related to contraction and expansion of demand curve !
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Which of the following elasticity of demand measures a movement along the demand curve rather than a shift in the curve?a)Income elasticity of demandb)Price elasticity of demandc)Substitution elasticity of demandd)None of these.Correct answer is option 'B'. Can you explain this answer?
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