Answer:
1.Also, the opposite relation is also true. For a normal good, if income falls, less of the normal good will be purchased. For an inferior good, if income falls, more of the inferior good will be purchased.
2.Various factors which affect the elasticity of demand of a commodity
3.If demand is elastic at a given price level, then should a company cut its price, the percentage drop in price will result in an even larger percentage increase in the quantity sold—thus raising total revenue.
4. The law of demand states that a higher price leads to a lower quantity demanded and that a lower price leads to a higher quantity demanded. Demand curves and demand schedules are tools used to summarize the relationship between quantity demanded and price.
5. The determinants are: Branding. Sellers can use advertising, product differentiation, product quality, customer service, and so forth to create such strong brand images that buyers have a strong preference for their goods. Market size.
6. Elastic demand means there is a substantial change in quantity demanded when another economic factor changes (typically the price of the good or service), whereas inelastic demand means that there is only a slight (or no change) in quantity demanded of the good or service when another economic factor is changed.
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