{"id":8933,"date":"2020-08-10T13:44:20","date_gmt":"2020-08-10T13:44:20","guid":{"rendered":"https:\/\/www.homeworkminutes.com\/infographics\/?p=8933"},"modified":"2023-01-11T00:41:39","modified_gmt":"2023-01-11T08:41:39","slug":"what-is-elasticity-of-demand-elasticity-vs-inelasticity","status":"publish","type":"post","link":"https:\/\/www.homeworkminutes.com\/infographics\/what-is-elasticity-of-demand-elasticity-vs-inelasticity\/","title":{"rendered":"What is Elasticity of Demand: Elasticity vs. Inelasticity"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">If you\u2019re doing a major in economics or it is one of your subjects, you\u2019ll come across the term elasticity of Demand. It is the responsiveness of the quantity that a commodity demands to changes in one of the variables on which it depends.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While calculating the elasticity of Demand, there are variables on which it depends:-<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The price of the concerned commodity<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Prices of the related commodities<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Lastly, the consumer\u2019s income<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">To understand the elasticity of Demand in comparison with the inelasticity, here is the comparative study of the same.<\/span><\/p>\n<blockquote><p><span style=\"font-weight: 400;\">Also read:-<\/span><\/p>\n<p><a href=\"https:\/\/www.homeworkminutes.com\/infographics\/differences-between-credit-and-debit-in-accounting\/\"><span style=\"font-weight: 400;\">Differences Between Credit and Debit in Accounting<\/span><\/a><\/p><\/blockquote>\n<h2><strong>The elasticity of Demand vs. Inelasticity of Demand\u00a0<\/strong><\/h2>\n<h3><strong>Elasticity of Demand\u00a0<\/strong><\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The elasticity of Demand refers to the change in Demand when the price\/income changes<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The elasticity coefficient for the elasticity of Demand is more than or equal to 1<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The graphic curve for it is shallow<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The commodities represented by it include luxury products<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The price sensitivity of elastic is more for the elasticity of Demand<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Example: Consider a radio or any electrical equipment whose prices fall from 500 to 400 per unit. In turn, the Demand will increase from 100 to 150 units. So, you must mark that as the price decreases, the demand increases.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To further study the various types of elasticity of demands, here are a few of them:-<\/span><\/p>\n<p><b>Price Elasticity<\/b><\/p>\n<p><span style=\"font-weight: 400;\">This type of elasticity of demand refers to the response of the quantity that is demanded, changing the price of the commodity. In this term, the consumer\u2019s income, taste, and the prices of all the goods remain unchangeable.\u00a0<\/span><\/p>\n<p><b>Income Elasticity\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The second type of elasticity of demand refers to the degree of responsiveness of the quantity with the change in the consumer\u2019s income.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So,\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">EI = Percentage change in quantity demanded \/ percentage change in income.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><b>Cross Electricity<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The cross elasticity of Demand includes two commodities, namely X\u00a0 and Y. It refers to the change in Demand for commodity x due to a change in the price of commodity Y.<\/span><\/p>\n<h3><strong>Inelasticity of Demand\u00a0<\/strong><\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Inelasticity of Demand is when a change in the price of the product doesn\u2019t change the Demand<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The elasticity coefficient for the inelasticity of demand is less than 1<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The graphic curve for it is steep<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The commodities represented by it include necessary products\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The price sensitivity of elastic is less for the inelasticity of Demand\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Further, one has to know how to change the inelasticity of Demand, whose calculation takes place as % change in demand \/ % change in price.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are five significant factors that determine the demands of an individual.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Price, Price of the alternatives, Generated income, Tastes or preferences, and Expectations. To wrap up, the inelastic changes hardly respond to price changes, and the steeper the curve, the more inelastic it is.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you\u2019re doing a major in economics or it is one of your subjects, you\u2019ll come across the term elasticity of Demand. It is the&#8230;<\/p>\n","protected":false},"author":1,"featured_media":8934,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[41],"tags":[319,320],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is Elasticity of Demand: Elasticity vs. Inelasticity<\/title>\n<meta name=\"description\" content=\"Do you know what is the elasticity of Demand? This guide has a comparative study of elasticity vs. inelasticity. 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