Q. 65.0( 2 Votes )

What is meant by

Answer :

The elasticity of demand determines the degree of responsiveness of the quantity demanded to the changes in price. It is the ratio of the percentage change in quantity demanded to the percentage change in price.

Demand is said to be inelastic if the percentage change in quantity demanded is less than the percentage change in prices. A decrease in price will result in a less than proportionate increase in the quantity demanded. The value of the elasticity coefficient in case of inelastic demand is less than 1.

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What is meant by Economics - Board Papers