Wat is elasticity? Describe different types of price elasticity.
|NU Year||Set: 3.(e) Marks: 6 Year: 2012|
The degree to which demand for a good or service varies with its price. Normally, sales increase with drop in prices and decrease with rise in prices. As a general rule, appliances, cars, confectionary and other non-essentials show elasticity of demand whereas most necessities (food, medicine, basic clothing) show inelasticity of demand (do not sell significantly more or less with changes in price).
Also called price demand elasticity.
Different types of price elasticity: