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| 1. |
Explain in brief, the following kinds of price elasticities of demand: (i) Highly elastic demand, (ii) Less Elastic Demand, (iii) Unitary elastic demand. |
| Answer» <html><body><p></p>Solution :1. High elastic demandDemand is said to be high elastic when even a small change in the <a href="https://interviewquestions.tuteehub.com/tag/price-1165141" style="font-weight:bold;" target="_blank" title="Click to know more about PRICE">PRICE</a> of a commodity leads to a considerable extension/contraction of the amount <a href="https://interviewquestions.tuteehub.com/tag/demanded-7675308" style="font-weight:bold;" target="_blank" title="Click to know more about DEMANDED">DEMANDED</a> of it.2. Low elastic demandWhen even a substantial change in price <a href="https://interviewquestions.tuteehub.com/tag/brings-2488276" style="font-weight:bold;" target="_blank" title="Click to know more about BRINGS">BRINGS</a> only a small extension/contraction in demand, it is said to be less elastic.3.Unitary elastic demandWhen a small change in price of a product causes a major change in its demand, it is said to be perfectly elastic demand. In perfectly elastic demand, a small <a href="https://interviewquestions.tuteehub.com/tag/rise-1189674" style="font-weight:bold;" target="_blank" title="Click to know more about RISE">RISE</a> in price results in fall in demand to zero, while a small fall in price causes increase in demand to infinity. In such a case, the demand is perfectly elastic or ep = <a href="https://interviewquestions.tuteehub.com/tag/00-254995" style="font-weight:bold;" target="_blank" title="Click to know more about 00">00</a>.</body></html> | |