Session-4 Elasticity of demand

1. Concept of elasticity of demand 2. Types of price elasticity of demand 3. Measurement of elasticity of demand

Numerical problems on elasticity of demand
1. 2. Let the demand function be Q = 225 – 15P. Find demand elasticity when P = Rs. 5 The demand function of potatoes is q = 20 -2p. Initial price of potatoes was Rs. 4 per Kg. If price increases by 20% ,find elasticity of demand. Following equations represent different possible demands – Q1 = 100 -20p1 , Q2=210 – 8P2 , Q3= 4+ 5p3 Find price elasticity in each case at, P = Rs.2 & Q = 40 units. Which of these is a Giffen good ? Demand function for readymade trousers is estimated to be Q = 2000 + 15Y – 5.5P When, P = Rs.150 & Y =Rs.15 thousand , determine ey& ep.

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SESSION - 5

1.Income elasticity of demand 2. Cross elasticity of demand 3. Promotional elasticity of demand 4. Determinants of elasticity of demand

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