One has need , have capacity to by and make decision to by, the demand comes in the market. OR
The demand for anything at a given price is the amount of it, which will be bought per unit of time at that price.
Change in demand caused by change in price of commodity in explained as elasticity.
TYPES OF ELASTICITY:
1- PRICE ELASTICITY:(Affect )
2- INCOME ELASTICITY: (Demand may increases by the increase in income)
3- CROSS ELASTICITY(Same as change in price of related good)
4- SUBSTITUTION ELASTICITY(Same as substitution for good)
INFLUENCE OF ELASTICITY ON DEMAND
1- Own price (Due to price of good)
2- Average Income (Due to limited income)
3- Population (Essential needs rises due to increase in population and nonessential goods demand decreased)
4- Consumer Habits/Taste(Due to special tasks or habit)
5- Possibilities of Substitution(If the very close substitute in available with attractive low price it effects the demand of actual so elasticity appears)
6- Price of Related good(Same are related goods)
In general elasticity depend on Own price, income, cross and substitution.
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