2. Prepared By Vyas Harshal

5. Perfectly elastic demand P R I C E y 0 x Perfectly elastic demand curve D D When the demand for a product changes –increases or decreases even when there is no change in price, it is known as perfect elastic demand.

6. Relatively elastic demand Relatively elastic demand curve P R I C E demand 0 x y D D When the proportionate change in demand is more than the proportionate changes in price, it is known as relatively elastic demand .

7. Elasticity of demand equal to utility Elasticity of demand equal to utility curve y x 0 demand P R I C E D D When the proportionate change in demand is equal to proportionate changes in price, it is known as unitary elastic demand

8. Relatively inelastic demand Relatively inelastic demand curve X O Y demand D D P R I C E When the proportionate change in demand is less than the proportionate changes in price, it is known as relatively inelastic demand

9. Perfectly inelastic demand demand D D Perfectly inelastic demand curve 0 Y X P R I C E When a change in price, howsover large, change no changes in quality demand, it is known as perfectly inelastic demand

10. ALL KINDS OF DEMAND CAN BE SHOWN IN ONE DIAGRAM AS FOLLOW D D1 D2 D3 D4 D5 Y X 0 DEMAND P R I C E WHERE D1) Perfectly elastic demand D2)Relatively elastic demand D3)Elasticity of demand equal to utility D4)Relatively inelastic demand D5)Perfectly inelastic demand

13. Percentage method or proportionate method Price elasticity of demand = Proportionate change in demand for x Proportionate change in Price for x OR _____ qx Qx / _____ px Px Here, qx = change in the quantity of x demanded Qx = original quantity of x demanded px = change in the price of x Px = original price of x

20. (5) Factors Affecting Price Elasticity Of Demand

23. (6) Practical Importance of the Concept of Price Elasticity Of Demand

26. (7) Income Elasticity Of Demand

28. Positive Income elasticity of demand Y P A D D B S O X Quantity Demanded Income

30. Negative Income elasticity of demand Price P B A S Total Revenue Quantity Demanded (000s)

31. Zero Income elasticity of demand Y X O D D Quantity Demanded Income

32. All Income Graphs Representation O Y Income A B C D E F X Quantity Demanded

33. Measurement Of Income Elasticity Of Demand Income Elasticity Of Demand = Proportionate change in Demand Proportionate change in Income i.e. Income Elasticity Of Demand = ∆ q Q Y ∆ y +

41. Types of Elasticity Of Substitution on Graph Change in QUANTITIY ratio of good x & y Change in PRICE ratio of good x & y O X Y E4 E1 E2 E3 E5

46. Measurement Cross Elasticity of Demand Proportionate change in Demand for product X Proportionate change in Price of product Y i.e. ∆ qx Qx Py ∆ p y + Cross Elasticity of Demand = Cross Elasticity of Demand =

47. Cross Elasticity of Demand For Substitutes Price of Y Demand for Y O Y X D D

48. Cross Elasticity of Demand For Complementary Products Price of Y O Y X D D Demand for Y

49. Cross Elasticity of Demand For Neutral Products Price of Y O Y X D Demand for Y

52. Advertising Elasticity of Demand Proportionate change in Demand for product Proportionate change in Advertising expenditure i.e. ∆ qx Q A ∆ a ÷ Advertising Elasticity of Demand = Advertising Elasticity of Demand =

53. Relationship Between Advertising Expenditure and Sales O X Y S S Sales Advertising Expenditure

57. Thanking You All

58. ******THE END******