Economics
This query is : Resolved
Prakash Tripathi
(Querist)
16 August 2016
How can we proof that if price of a commodity rises and total revenue also rises and vice versa then demand for the commodity will be relatively inelastic
Amol S Joglekar
(Expert)
17 August 2016
Demand, Supply and Price.
You can prove the same with the numerical example....
P1 = 10......S1= 100,000................therefore revenue =1,000,000
P2 = 12.....S2 = 83,333........... ......therefore revenue = 1,000,000
P3 = 9........S3 = 111,111................therefore revenue = 1,000,000
In this example the PRICE elasticity of DEMAND is perfectly inelastic.
If PED (Price Elasticity of Demand) is less than 1......it is inelastic
If PED is zero....it is perfect inelastic
If PED is greater than 1 ........it is elastic
If PED is infinite........ it is perfect elastic
You can prove the same with the numerical example....
P1 = 10......S1= 100,000................therefore revenue =1,000,000
P2 = 12.....S2 = 83,333........... ......therefore revenue = 1,000,000
P3 = 9........S3 = 111,111................therefore revenue = 1,000,000
In this example the PRICE elasticity of DEMAND is perfectly inelastic.
If PED (Price Elasticity of Demand) is less than 1......it is inelastic
If PED is zero....it is perfect inelastic
If PED is greater than 1 ........it is elastic
If PED is infinite........ it is perfect elastic
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Clarification on GST, TDS, and Accounting Provisions for Import/Export Commission Agents,profes. ser
- Employee secondment
- Ito add credit side of bank
- GSTR9 Annual Return
- Applicability of tax on invoice
- Import of Capital Machine
- LLP audit and disclosure
- Capital gain on commercial property and investment in residential property
- Rectification under processing even after 6 months cpc portal
- Positive Balance in RCM Liability/ITC Statement – Commercial Rent RCM – Guidance Required
- Regime change
- Tally: Imported bank entries do not show up in manual reconciliation
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
- RCM @ 5% on Hamali charges, Transport Charges, Unloading charges we take ITC or not
- Need Professional Opinion - AY 2012-13 Old Demand & AY 2026-27 Refund Adjustment
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
