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Elasticity of Demand — Revision Notes

ICSE · Class 12 · Economics

Elasticity of Demand revision notes for ICSE Class 12 Economics: 4 topics in quick points. Part of the ICSE Class 12 Economics syllabus.

62 questions36 flashcards5 formulas & key relations5 concepts

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Key Topics to Revise

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1. Degrees of Price Elasticity of Demand

  • Price elasticity of demand differs from commodity to commodity and from person to person.
  • There are five kinds or degrees of price elasticity of demand.
  • The absolute value of the elasticity coefficient ranges from zero to infinity.
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2. Methods of Measuring Price Elasticity of Demand

  • There are four important methods of measuring price elasticity of demand: percentage method, total expenditure method, geometrical or point method, and arc method.
  • Percentage method is also called proportionate method or mathematical method.
  • Proportionate method is obtained from the percentage method by cancelling 100 from numerator and denominator.
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3. Total Expenditure Method and Comparison of Elasticity

  • Total expenditure is price multiplied by quantity purchased.
  • If price falls and total expenditure rises, demand is elastic.
  • If price rises and total expenditure falls, demand is elastic.
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4. Income Elasticity of Demand

  • Income elasticity of demand measures responsiveness of demand to a change in consumer income, other determinants remaining constant.
  • According to Watson, income elasticity of demand means the ratio of the percentage change in quantity demanded to the percentage change in income.
  • Positive income elasticity is found in normal goods.

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Full Notes

Key Concepts

Price elasticity of demand showsWhen quantity demanded does not changeWhen a large change in priceWhen percentage change in demandWhen percentage change in demand

Frequently Asked Questions

What are the important topics in Elasticity of Demand for ICSE Class 12 Economics?
Key topics in Elasticity of Demand include Degrees of Price Elasticity of Demand, Methods of Measuring Price Elasticity of Demand, Total Expenditure Method and Comparison of Elasticity, Income Elasticity of Demand. Study these first, then practise questions on each for the ICSE Class 12 board exam.
How should I revise Elasticity of Demand for the ICSE Class 12 board exam?
Learn the core ideas first, then work through the 62 practice questions on Elasticity of Demand. Revise definitions regularly and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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