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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 ...
Explanation:
Price elasticity of demand measures the responsiveness of demand to a change in price. It measures the percentage change in quantity demanded in response to a percentage change in price. It is a measure of the slope of the demand curve. When the price of a good changes, consumers will buy more or less of it, depending on how much the price changes. This means that the quantity demanded will change along the demand curve.
Example:
Suppose the price of a product increases by 10%, and as a result, the quantity demanded decreases by 5%. Then the price elasticity of demand is (-5%/10%) = -0.5. This means that for every 1% increase in price, the quantity demanded will decrease by 0.5%.
Conclusion:
Price elasticity of demand is a measure of the responsiveness of demand to a change in price. It measures a movement along the demand curve rather than a shift in the curve. It is an important concept in economics because it helps firms to determine the optimal price for their products, and it helps policymakers to understand the effects of price changes on consumers.
Price elasticity of demand measures the responsiveness of demand to a change in price. It measures the percentage change in quantity demanded in response to a percentage change in price. It is a measure of the slope of the demand curve. When the price of a good changes, consumers will buy more or less of it, depending on how much the price changes. This means that the quantity demanded will change along the demand curve.
Example:
Suppose the price of a product increases by 10%, and as a result, the quantity demanded decreases by 5%. Then the price elasticity of demand is (-5%/10%) = -0.5. This means that for every 1% increase in price, the quantity demanded will decrease by 0.5%.
Conclusion:
Price elasticity of demand is a measure of the responsiveness of demand to a change in price. It measures a movement along the demand curve rather than a shift in the curve. It is an important concept in economics because it helps firms to determine the optimal price for their products, and it helps policymakers to understand the effects of price changes on consumers.
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Which of the following elasticity of demand measures a movement along ...
Movement along the same demand curve occurs due to the change in price of commodity hence price elasticity of demand is used to measure the elasticity of movement along the 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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