Percentage method

Percentage method:

This is measured as the associative change in demand divided by associative change in price (or) percentage change in demand divided by the percentage change in price. Formula is,

ep =  %Δq/% Δp

For illustration, the price of rice increases by 10 percent and the demand for rice falls by 15 percent,

Then, ep = 15/10 = 1.5

This means that the demand for rice is flexible.

When the demand falls to 5 percent for a 10 percent rise in price, then ep = 5/10 = 0.5. This means that the demand for rice is not flexible. Therefore there are five measures of elasticity.

a) Elastic demand, when the value of elasticity is more than 1

b) Inelastic demand, when the value of elasticity is below than 1

c) Unitary elastic demand, when the value of elasticity is equivalent to 1.

d) Perfectly inelastic demand, when the value of elasticity becomes zero.

e) Perfectly elastic demand, when the value of elasticity becomes infinity.

 

Latest technology based Economics Online Tutoring Assistance

Tutors, at the www.tutorsglobe.com, take pledge to provide full satisfaction and assurance in Theory of Demand help via online tutoring. Students are getting 100% satisfaction by online tutors across the globe. Here you can get homework help for Theory of Demand, project ideas and tutorials. We provide email based Theory of Demand help. You can join us to ask queries 24x7 with live, experienced and qualified online tutors specialized in Theory of Demand. Through Online Tutoring, you would be able to complete your homework or assignments at your home. Tutors at the TutorsGlobe are committed to provide the best quality online tutoring assistance for Economics Homework help and assignment help services. They use their experience, as they have solved thousands of Economics assignments, which may help you to solve your complex issues of Theory of Demand. TutorsGlobe assure for the best quality compliance to your homework. Compromise with quality is not in our dictionary. If we feel that we are not able to provide the homework help as per the deadline or given instruction by the student, we refund the money of the student without any delay.