part#2 Class 11th microeconomics chapter-6||price elastically of demand||मांग की कीमत लोच||हिंदी में

What is Price Elasticity of Demand? Price elasticity of demand (PED) is an economic measurement of how quantity demanded of a good will be affected by changes in its price. In other words, it’s a way to figure out the responsiveness of consumers to fluctuations in price (as opposed to price elasticity of supply, which determines the responsiveness of supply to price).. I know equations are negative amounts of fun, but this one is super simple.    How to Calculate Price Elasticity of Demand Price Elasticity of Demand = (% Change in Quantity Demanded)/(% Change in Price) Since quantity demanded usually decreases with price, the price elasticity coefficient is almost always negative. Economists, being a lazy bunch, usually express the coefficient as a positive number even when its meaning is the opposite. We're a pretty difficult people. It’s important to note, however, a decrease in quantity demanded does not automatically mean that revenue decreases. The additional profit margin could make up for the slight decrease in purchases. When the price elasticity of a good is less than 1, it’s considered inelastic. That means a one unit increase in price resulted in a less than one unit decrease in demand. On the other hand, if the coefficient (the absolute value) is more than 1, the good is elastic. That means a unit increase in price will cause an even greater drop in demand. Theoretically, revenue will be maximized when the price elasticity of a good equals 1, or in other words, when demand is unit elastic. How can you increase demand and prices for your product? Obviously, at least hopefully, you want your business to capture as much cash on the table as possible. As such, you need to make your product as inelastic as possible, increasing demand, regardless of how expensive you make the product. Essentially, you want your customers, whether through particular features, your service, or world class marketing, to not be able to live without your business. The inputs necessary for this phenomenon to occur will adjust with different customer segments, but the thought process for each segment remains the same. So, how do you determine your product's elasticity for each segment, and use this knowledge to your advantage? Here are a few things to think about:

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