# Sandeep Garg Microeconomics Class 11: Chapter 4 Elasticity of Demand

Sandeep Garg Class 11 Microeconomics Solutions Chapter 4 Elasticity of Demand is explained by the expert Economics teachers from the latest edition of Sandeep Garg Microeconomics Class 11 textbook solutions. We at BYJUâ€™S provide Sandeep Garg Economics Class 11 Solutions to give comprehensive insight about the subject to the students. These insights help as a priceless benefit to students while completing their homework or while studying for their exams. There are numerous concepts in economics, however, we at BYJUâ€™S provide the students with the solution from Elasticity of Demand, which will be useful for the students to score well in the board examinations.

## Sandeep Garg Solutions Class 11 – Chapter 4 – Part A – Microeconomics

Question 1

What is the Elasticity of Demand?

Ans: Elasticity of Demand refers to the percentage change in demand for a commodity with respect to the percentage change in any of the factors affecting demand for that commodity.

Question 2

How is the Elasticity of Demand calculated?

Ans:

$$\begin{array}{l}\frac{Percentage\, change\, in\, demand\, for\, X}{Percentage\, change\, in\, a\, factor \, affecting\, the\, demand\, for\, X}\end{array}$$

Question 3

What are the 5 Degrees of Elasticity of Demand?

Ans: 5 types of price elasticities of demand are:

• Perfectly elastic demand
• Perfectly inelastic demand
• Highly elastic demand
• Less elastic demand
• Unitary elastic demand

Question 4

What are the factors that affect the price elasticity of demand?

Ans: Factors affecting the price elasticity of demand are:

• Nature of commodity
• Availability of substitutes
• Income level
• Level of price
• Number of uses
• Time period
• Habits

Question 5

The demand for a good falls to 240 units in response to the rise in price by â‚¹.2. If the original demand was 300 units at the price of â‚¹.20, calculate the price elasticity of demand.

New Quantity (
$$\begin{array}{l}_{Q_{1}}\end{array}$$
) = 240 Units

#### Rise in Price ($$\begin{array}{l}\triangle P\end{array}$$) = â‚¹2

Original Quantity (Q) = 300 Units

#### Original Price = â‚¹ 20

Change in Quantity (
$$\begin{array}{l}\triangle Q\end{array}$$
) = -60 Units
New Price (
$$\begin{array}{l}_{P_{1}}\end{array}$$
) = â‚¹ 22
Elasticity of demand
$$\begin{array}{l}^{_{E_{d}}}\end{array}$$
= ?
$$\begin{array}{l}Price\, elasticity\, of\, Demand\, _{E^{_{d}}} = \frac{\triangle Q}{\triangle P}\times \frac{P}{Q}=\frac{-60}{2}\times \frac{20}{300}=\left (- \right )2\end{array}$$

Solution:

$$\begin{array}{l}_{E_{d}}=\left (-\right )2 \left ( Demand\, is \, highly\, elastic \, as\, {E_{d}} >\, 1\right )\end{array}$$

### State whether the following statements are true or false.

Question 6

A commodity with a large number of close substitutes shows high elasticity of demand.

Ans: True

Question 7

In the case of the horizontal straight line demand curve, demand does not change even with the change in price.

Ans: False

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