Elasticity of

Demand

The Role Play

Lets learn the concept of Income Elasticity of Demand through a
role play.

Contributors:
Khushboo Parekh
Shalaka Kulkarni
Aprajita Mittra
Aakriti Pandey
Akanksha Kaushik
Drishty Singh

Introduction

Elasticity of demand is defined as the percentage change

in quantity demanded caused by 1% change in the
determinant
under
consideration
while
other
determinants are held constant.

Elasticity of Demand (Ed) is a measure to show

responsiveness in economics, of a quantity demanded
and its change in price, ceteris paribus.

The formula for calculation of Elasticity of Demand

Ed = Percentage change in Quantity
Percentage change in Price

Types of Elasticity of Demand

Price Elasticity of demand

Income Elasticity of demand

Cross price elasticity of demand

Arc elasticity of demand

Advertising and Promotional elasticity

Income Elasticity of Demand

Income Elasticity of Demand is the degree of

responsiveness of quantity demanded of any commodity
X to the change in consumers income.

The formula for Elasticity of Demand is expressed as

Ey = Percentage change in quantity demand of X
Percentage change in Income

The types of income elasticity are:

1.

Positive Income Elasticity

2.

Negative Income Elasticity

3.

Zero Income Elasticity

Conclusion

The types of Income Elasticity of demand were discussed

with daily life examples

We studied the consequences of rise and fall in income

with respect to their changed demands

Also gave an insight upon how lives of people are

affected with the change in income

The higher the percentage change, more is the effect,

and vice versa

Thank you!