measurement of elasticityb.e (cs/it) - ee&fa/c - dr.k.baranidharan, sri sairam institute of...

8/11/2019 Measurement of ELASTICITYB.E (CS/IT) - EE&FA/C - DR.K.BARANIDHARAN, SRI SAIRAM INSTITUTE OF TECHNOLOGY, CHENNAI

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Prepared by :

Dr. K. BARANIDHARAN

PROF.MBASRI SAIRAM INSTITUTE OF TECHNOLOGY

CHENNAI

ENGINEERING ECONOMICS

AND

FINANCIAL ACCOUNTING

Sri Sairam Institute of Technology 2


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EngineeringEconomics& Financial

Accounting

Eefa

315 August 2014


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Measurement of elasticity


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Measurement of ELASTICITY

1.Perfectly elasticity of demand

2. Perfectly inelasticity of demand

3. Relatively elasticity demand

4.Relatively inelasticity demand

5. Unity elasticity


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1.Perfectly elasticity of demand

when any quantity can besold at a given price, and

when there no need toreduce the price, the

demand is said to beperfectly elastic


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1.Perfectly Elastic:(the quantity

demanded increases from OQ to Q1,

from OQ1 to OQ2 eventhough thereis . Price is fixed at

OP.)

Q

OX

Y

p

Q1 Q2


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2. Perfectly inelasticity of demand

the degree of change inprice leads to little change

in the quantity demanded,then the elasticity is said to

be perfectly inelastic


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2. Perfectly Inelastic:

increase the price from OP1 to OP2, the

quantity demanded has not fallen. And thereis fall in the price from OP3 to OP2, the

quantity demanded remains unchanged)

p2

OX

Y

p1

Q

p3


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3. Relatively elasticity demand

The demand said to be

relatively elastic when thechange in demandis more

then the change in theprice.


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3. Relatively Elastic:

the quantity demand increasefrom OQ1 to OQ2

Because Of A Decrease in Pricefrom OP1 to OP2.

The extent of increase in the quantity demanded

is grater than the extent of fall in the price

p1

O

X

Y

p2

Q2Q1

D

D


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4 R l ti l l l ti


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4. Relatively lnelastic

the quantity demanded increase from OQ1 to OQ2

because of a decrease in the price from OP1 to

OP2. the extend of increase in the quantitydemanded is less than the extent of fall in the

price.

p1

O

X

Y

p2

Q2Q1

D

D1


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5. Unity elasticity

The elasticity in demand

is said to be unity whenthe change in demand is

equal to the change inprice.


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5. Unitary Elastic

the quantity demanded increase from OQ1 to OQ2

because of a decrease in the price from OP1 to OP2.

the extent of increase in the quantity demanded is

equal to the extent of fall in the price.

p1

O

X

Y

p2

Q2Q1

D

D1


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measurement of elasticityb.e (cs/it) - ee&fa/c - dr.k.baranidharan, sri sairam institute of...

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