Economics 12 Notes for Economics Notes

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Relatively elastic demand

If the percentage change in quantity demand is greater than the percentage change in price is known as relatively elastic demand. For example 10% change in demand due to 5% change in demand; we can explain it by following figure

relatively elastic demand

On the above figure, when price is OP then quantity demand for that commodity is OQ. When prices become P1 by increasing by 5% then quantity demand decreases from Q to Q1 by 10% and when price decreases by 5% to Po then quantity demand increases from Q to Qo by 10%.

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