1. Consider the market for ice-cream. Compare the price elasticity demand for ice cream in
(i) Winter vs (ii) Summer.
Show your answers in two graphs.
2. For the market for oranges, when price rises from $4 to $5, quantity demanded drops from 8 to 7.
(a) Calculate the price elasticity of demand.
(b) Is the demand for oranges elastic?
1. If we talk about the market of ice cream then as we all know that demand will be high in summer as compared to winter
in summer the price elasticity of demand will be elastic in nature
An Elastic demand is that type of demand in which even there is a small change in the price can causes heavy change in the quantity demanded
in this the consumers are price sensitive
if there is small increase in the price then consumer shift to other substitute
If we talk about in winter then price elasticity of demand is inelastic in nature
An inelastic demand is that type of demand in which even there is very high change in the price will cause a very low change in the quantity demanded
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