TYPES OF ELASTICITY
We nay distinguish between the three types of elasticizes. Price Elasticity income and Cross Elasticity.
Price elasticity measures responsiveness (If potential buyers to change in price. I’ is the ratio of percentage change in quantity demanded iu scrupulous to a percentage change in price. (For fuller explanation see p. 116).
Income Elasticity is a measure of responsiveness of potential buyers to change in income. It shows how the quantity demanded will change when the income the purchaser changes, the price of the compelled,duty germanium the same. It may he defined thus Climax jay of alleluia.Baguio (If the percentage change in the amount spent on the Commodity to a percentage change in the consumers in price of combustibility remaining constant.Income Elasticity.
Whereas is change, stands for some increase in q and for decrease in dais the quantity of commodity .A is the price of commodity. A PR the price of commodity B and yd is some proportional increase in personal disposable income.