Elasticity of demand class 11 notes are presented in this post for easy understanding of the concept. By taking these notes, you can stay active and engaged throughout your reading, revision, and lectures. They also help with clear thinking and understanding. Choose the most important ideas to focus on. These notes provide a useful record of important information and its sources. You’ll be able to recall better what you heard with these notes.
- Elasticity of demand
- Price elasticity of demand
- Percentage method
- Kinds of elasticity of demand
- Factors affecting the price elasticity of demand
Elasticity of demand class 11
Demand elasticity refers to the rate of change in demand for a product if one of the factors influencing the demand for this product changes.
Ed = percentage change in demand/percentage change in a factor affecting demand
Price elasticity of demand.
Price elasticity of demand is the degree of fluctuations in the demand for goods about the change in the price of such goods. It establishes a quantitative relationship.
Percentage method under Elasticity of demand class 11
According to this method, elasticity is measured as a ratio of the percentage of change in the requested amount to the percentage of price change.
Ed = percentage change in demand/percentage change in price
OR
Ed = ∆Q/∆P × P1/Q1
Where,
∆Q = Q2 – Q1
∆P = P2 – P1
Kinds of demand elasticity
- If there is infinite demand at a particular price and the price rises slightly to zero, then the demand for such goods is called perfectly elasticity. The perfect elasticity demand curve is a horizontal straight line parallel to the x-axis.
- If the demand does not change even if the price changes, the demand for such a product is said to be perfectly inelastic
- If the rate of change in the requested quantity is greater than the rate of price change, then the demand for such goods is said to be highly elastic.
- If the rate of change in the requested quantity is less than the rate of change in price and demand, then the demand is said to be less elastic.
- Demand for a product is said to be unitary elastic if the rate of change in demand is equal to the rate of price change.
Factors affecting price elasticity of demand.
- Nature of commodity
- Substitute availability
- Income level
- Price level
- Postponement in consumption
- Number of uses
- Total expenditure share
- Period
- Habits
Elasticity of demand class 11 notes gives a wholesome definition of what elasticity is and what are its various types. These notes also provide the factors affecting the price elasticity of demand. You can stay active and engaged throughout your reading, revision, and lectures by taking these notes. Additionally, they aid in clear thinking and comprehension. Selectively identify important ideas. A useful record of important information and its sources can be found in these notes. These notes will help you remember what you heard better.