Substitution Elasticity

Substitution Elasticity We may also take notice of another concept of elasticity, viz., substitution elasticity. In this connection, we make use of the concept of marginal rate of substitution already discussed in the indifference curve analysis. The elasticity of...

TYPES OF ELASTICITY

TYPES OF ELASTICITY We nay distinguish between the three types of elasticizes. Price Elasticity income and Cross Elasticity. Price Elasticity Price elasticity measures responsiveness (If potential buyers to change in price. I’ is the ratio of percentage change...

Elastic and Inelastic Demand

Elastic and Inelastic Demand A change in demand is not Ulysses proportionate to the chalk rice, small change in price may lead to a great change in demand. In that case, we shall say that the demand is elastic or sensitive o,r responsive. If, on the Luther hand, even...