Measurement of the Elasticity of Demand The measurement of elasticity of demand is the ratio of the percentage change in quantity demanded to the percentage change in price. There are three methods of measuring the elasticity of demand which are as follows Total Outlay Method Proportionate or Percentage Method Point Method or Geometrical Method
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Factors Determining the Elasticity of Demand The demand for a commodity is more elastic and that of the other commodity is less elastic, this usually depends on several factors. It is important to note that the elasticity of demand for a product can change over time. For example, the demand for smartphones has become more
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Classification of Elasticity The Elasticity of Demand could be of 3 types based on the factor which affects the change in the demand for a commodity. Price Elasticity of Demand Income Elasticity of Demand Cross Elasticity of Demand Measurement of the Elasticity Total Outlay Method Proportionate or Percentage Method Point Method or Geometrical Method
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Meaning of the Elasticity of Demand The Elasticity of Demand is related to the Law of Demand, it is the measure of the change in the demand of a commodity with respect to the change in the price of the commodity. In simple words, elasticity of demand refers to an increase or decrease in demand,
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Exceptions to The Law of Demand From the analysis of The Law of Demand, it is clear that in ordinary conditions, demand increases on decrease in price of a commodity and the demand curve falls downwards from left to right. But there are some exceptions to the law of demand and sometimes, even on decrease
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Definition of The Law of Demand The law of demand states that other things remain the same, a decrease in prices causes an increase in demand and an increase in prices causes a decrease in demand. This law is based on The Law of Diminishing Utility which states that as we keep purchasing a commodity its
Committee Organization A Committee Organization is a type of democratic organization where all the decisions and work are carried out after mutual discussions and majority voting. Similarly, it has a Working Committee which is formed by the heads of different departments of the organization, who put forward the problems of each department in the meetings.
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Line and Staff Organization This method was developed to remove the defects of the Line Organization and Functional Organization. Under this system, the work is divided into independent divisions, and responsibility is also divided in a scalar form but a technical specialist is also appointed along with the departmental heads. These specialists only give advice
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Functional Organization The principle of Functional Organization was developed by F.W. Taylor. He emphasized that under this system one person should be allotted only one job in which he is specialized. This organizational structure is built on the principle that no person can be specialized in all fields. Thus, each person should be given one
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Line Organization This form of organization has several names like Vertical Organization, Scalar Organization, Military Type Organization, or Departmental Organization. This is the oldest and most popular form of organization. It creates a chain of command, which allows the flow of authority downwards, from the top management to the subordinates. In other words, the highest
