elasticity of demand ppt for bba bcom mba students

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1. Chhatrapati Shahu Ji Maharaj University, Kanpur ELASTICITY OF DEMAND PRESENTED BY:- ROSHNI RAJPOOT RUDRA PRATAP SINGH RUDRANSH YADAV SACHIN GUPTA SAGAR GUPTA

2. Definition: Elasticity of demand is the responsiveness of the quantity demanded for a good or service to a change in factors such as price, income, or price of related goods. Key Concept:   Emphasize that it measures how much demand changes in percentage terms for a given percentage change in the influencing factor

3. TYPES OF ELASTICITY OF DEMAND PRICE ELASTICITY OF DEMAND INCOME ELASTICITY O DEMAND CROSS ELASTICITY OF DEMAND ADVERTISING ELASTICITY OF DEMAND

4. PRICE ELASTICITY OF DEMAND:- Price elasticity of demand (PED) measures the sensitivity of the quantity of a good or service demanded by consumers to a change in its price. It is calculated as the percentage change in quantity demanded divided by the percentage change in price.

5. More Elastic : Flatter demand curve (small change in price  large change in demand). Less Elastic : Steeper demand curve (large change in price  small change in demand)  

6. TYPES OR DEGREES OF PRICE ELASTICITY OF DEMAND     PERFECTLY ELASTIC DEMAND [E P = ∞] PERFECTLY INELASTIC DEMAND [E P = 0] RELATIVELY ELASTIC DEMAND [E P > 1] RELATIVELY INELASTIC DEMAND [E P < 1] UNITARY ELASTIC DEMAND [E P = 1]  

7. PERFECTLY ELASTIC DEMAND (E P = ∞ ) The Quantity Demanded increases infinitely (or by unlimited quantity) with a small fall in price or quantity demanded falls to zero with a small rise in price. 2. PERFECTLY INELASTIC DEMAND (E P = 0)   The demand remains constant whatever may be the price (i.e. price may rise or fall).

8. 3. RELATIVELY ELASTIC DEMAND [E P > 1]   Percentage change in demand is greater than the percentage change in price. 4. RELATIVELY INELASTIC DEMAND [E P < 1]   Percentage change in quantity demanded is less than the percentage change in price.

9. 5. UNITARY ELASTIC DEMAND [E P = 1]   Percentage change in quantity demanded is equal to the percentage change in price.  

10. INCOME ELASTICITY OF DEMAND:- Income elasticity of demand (YED) measures how much the quantity demanded of a good changes in response to a change in consumer income. YED can be positive (normal goods, where demand increases with income) or negative (inferior goods, where demand decreases with income).

11. TYPES OF INCOME ELASTICITY OF DEMAND   POSITIVE INCOME ELASTICITY OF DEMAND - INCOME ELASTICITY GREATER THEN UNITY (E Y > 1) - INCOME ELASTICITY EQUAL TO UNITY (E Y =1) - INCOME ELASTICITY LESS THEN UNITY(E Y <1) NEGATIVE INCOME ELASTICITY OF DEMAND(E Y <0) ZERO INCOME ELASTICITY OF DEMAND(E Y =0)  

12. CROSS ELASTICITY OF DEMAND :- Cross elasticity of demand is a measurement of how much the price of one good changes when the price of another good changes as well.  THE FORMULA :

13. TYPES OF CROSS ELASTICITY OF DEMAND :- POSITIVE ELASTCITY OF DEMAND NEGATIVE ELASTICITY OF DEMAND POSTIVE ELASTICITY OF DEMAND (E C >0) : NEGATIVE ELASTICITY OF DEMAND (E C <0) :

14. ADVERTISING ELASTICITY OF DEMAND :- Advertising elasticity of demand (AED) is a metric that measures how much the demand for a product changes in response to a change in the company's advertising expenditure.

15. TYPES OF ADVERTISING ELASTICITY OF DEMAND :- AED > 1 (ELASTIC): - Demand is highly responsive to advertising.  AED < 1 (INELASTIC): - Demand is less responsive to advertising.  AED = 0 (PERFECTLY INELASTIC): - Advertising expenditure has no effect on demand.

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