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Elasticity Of Demand
PRODUCT HISTORY
The company originally started in Switzerland in 1885, when
Julius Maggi took over his father's mill.
Maggi was the first to bring protein-rich legume meals to the
market, and followed up with a ready-made soup based on
legume meals in 1886
In 1947, Maggi's holding company merged with the Nestl
company.
Nestle is a Swiss company, founded in 1866 by Henri Nestle.
Nestle market its products in 130 countries across the world.
Maggi has been Nestl's flagship culinary brand not only in
India, but globally as well.
LAW OF DEMAND
Demand for a commodity increases when
its price decreases and falls when its prices
rises other things remaining constant.
Price
Elasticity
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Elasticity
Demand
Income
Elasticity
Cross Price
Elasticity
e = percentage/proportional change in
quantity demanded
percentage/proportional
change in price
Unit
ary
Elast
ic
Price
Elasti
city
Relati
vely
Inelast
ic
Perfec
tly
Inelas
tic
Relati
vely
Elasti
c
Perfectly Elastic
Consumers have
indefinite
demand at a
particular price
and none at all
at an even
slightly higher
than this given
price, demand is
PERFECTLY
ELASTIC
Perfectly Inelastic
Relatively Elastic
When the
proportion of
change in the
quantity
demanded is
greater than that
of price, the
demand is said to
be RELATIVELY
ELASTIC
Relatively Inelastic
When the
proportion of
change in the
quantity demanded
is less than that of
price the demand
is considered to be
RELATIVELY
INELASTIC
Unitary Elastic
When the
proportion of
change in
demand is
exactly the same
as the change in
price, the
demand is said to
be UNITARY
ELASTIC
Measurement
Of Price
Elasticity
Arc Method
Geometric/
Point
Method
Point/Geometric Method
This method
attempts to
measure the
price
elasticity of
demand at a
particular
Point Elasticity = Lower segment of demand
point on
curve below the point
Upperdemand
segment of demand
curve below the point
Arc Elasticity
of Demand
measures the
elasticity at
the mid point
between two
points on a
curve
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Practical Applications
To businessmen
To the government and finance minister
To international traders
To policy makers
To trade unionists
Thank you