Thursday, July 11, 2013

PowerPoint Presentation On Elasticity

PPT On Elasticity

Elasticity Presentation Transcript:
1. Meaning of elasticity
Elasticity of Demand refers to the degree of responsiveness of quantity demanded to the changes in the determinants of demand  Law of demand will tell you the direction i.e. it tells you which way the demand goes when the price changes. But the elasticity of demand tells you how much the demand will change with the change in price to demand to the change in any factor. 2. Types of elasticity 1. Price Elasticity of Demand

2. Income Elasticity of Demand
3. Cross Elasticity of Demand

3. Price Elasticity of Demand
PED is a measure of the responsiveness of demand to changes in the commodity’s own price Algebraically , it is the percentage change in quantity demanded divided by the percentage change in price. Percentage Change in Qty Demanded Percentage Change in price

4. Price Elasticity of Demand-types
Price Elasticity of Demand is the degree of responsiveness of demand to the change in price of that commodity. Types- Perfectly inelastic demand (ep = 0) Inelastic (less elastic) demand (e < 1) Unitary elasticity (e = 1) Elastic (more elastic) demand (e > 1) Perfectly elastic demand (e = ∞)

5. Types of elasticity
E =α Indifinite demand at a given price Curve is horizontal straight line Here Demand is said to be perfectly elastic

6. Types of elasticity
E =1 A proportionate change in price is accompanied by the same proportionate change in quantity demanded of the good. Here the demand is said to be unitary elastic.

7. Types of elasticity
E =0 No change to change in price Curve will be a vertical straight line. This is referred as perfectly inelastic

8. Types of elasticity
E>1 A change in price is accompanied by a greater percentage change in demand Curve is gradually sloping. It is also referred as relatively elastic

9. Types of elasticity
E <1 br="">A change in price is accompanied by a less than percentage change in demand
Curve is steeply sloping.
It is also referred as relatively inelastic

10. For more please refer our PPT.
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