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MCQ Questions for Class 12 Economics Chapter 2 Theory of Consumer Behaviour with Answers

elasticity of demand for comfort goods are
elasticity of demand for comfort goods are

This sensitiveness of demand against a change in price is explained by the Price Elasticity of Demand. In mainstream Indian culture, coarse grains are considered the poor man’s food. When people move out of poverty, they prefer to eat rice and wheat, rather than assorted millets. People substitute superior goods for inferior ones when their incomes go up.

elasticity of demand for comfort goods are

The reason stated for this is the redundant human nature to change habits. We generally stick to a commodity and respond very late to the price changes. However, the elasticity of demand is high in a longer time period as our habit changes over time.

Know more about Demand analysis and ace the concept of The elasticity of demand and its measurement. On a rectangular hyperbola demand curve, elasticity at all points is equal to one. This is because elasticity as per one method, is measured by taking the area below the curve.

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Chapters of the Earth Science were also very satisfactory. If a consumer is habitual to particular commodity like Cigarette , Coffee then DEMAND IS INELASTIC as consumer will need it at any cost. If CLOSE SUBSTITUTE ARE EASILY OR READILY AVAILABLE, even a very small increase will make consumer to shift to other goods and hence demand would be ELASTIC OR HIGH. This method was EVOLVED BY MARSHAL and in this Elasticity of demand is measured in terms of RELATIONSHIP BETWEEN PRICE OF THE COMMODITY AND EXPENDITURE INCURRED. GkRankers has been created specifically for students for their all round development. Here, you can find all types of study materials and latest news from educational field at one space.

In other words, different items have varying degrees of sensitivity to price changes. The Elasticity of Demand is highly dependent on the time period. The elasticity of demand for comfort goods are Price Elasticity of Demand is generally higher in the long-run and low in a short-run. This is the major benefit of inelastic goods over elastic ones.

  • If the proportion spent on the product is high, the demand is elastic and vice versa.
  • The demand for necessary good does not fluctuate with the price as these goods are basic for day-to-day life.
  • Economists unveiled that the prices of certain goods are inelastic.
  • The earnings elasticity of demand is used to measure the sensitivity of a change in the quantity demanded relative to a change in shoppers’ incomes.
  • The worth elasticity of demand is calculated by dividing the percent change within the amount demanded of an excellent or service by its percent change in its price level.

If this formula gives a number greater than 1, the demand is elastic. In other words, quantity changes faster than price. The elasticity of the demand of the object and the expenditure on the object is closely related. Budget set is a collection of all bundles that a consumer purchases from their income at market prices.

The most important part of efficient production is in proper scientific production planning. No resource can be wasted, it may be material or capacity or labour. So, planning has to done with at most care as the right product has to reach the right place at the right time. “Hit and miss” strategies can no longer be experimented.

When the demand for a product is inelastic, the quality demanded responds poorly to cost adjustments. The price of a good falls in relation to its substitute. Consumers can easily switch from one good to another even if there is only a small change in price and so its demand will increase. Hence the price elasticity of demand for commodities having close substitutes is relatively high. Luxuries are the goods which are not essential, rather, they are consumed for leisure or comfort purposes. For example, air conditioners, branded garments etc.

Price Elasticity of Demand

The demand for such goods is highly responsive to the change in their price. A rise in their price reduces the demand for them and vice-versa. Major cause being the necessity of the product or its cost. A change in price does not always lead to the same proportionate change in demand. For example, a small change in the price of washing machine may affect to a considerable extent, whereas, large change in the price of sugar may not affect its demand. So, elasticity of demand is different for different goods.

Is demand for luxury goods elastic or inelastic?

Luxury goods are said to have high income elasticity of demand. In other words, as people become wealthier, they will buy more and more of the luxury good. Luxury goods are highly sensitive to economic upturns and downturns; therefore, the state of the economy will often shape consumer spending on luxury goods.

Finally, elasticity of demand for a commodity is influenced by numerous factors. However, it’s impossible to say which element or mix of variables has the most impact. It all boils down to the specifics of each scenario. The nature of a commodity’s demand is affected by its category. A necessity, a luxury, or a comfort for one person may be a want for another. So for example, for instance there’s some drugs, for example you are a diabetic and you want insulin, if you do not get insulin, actually unhealthy issues are going to occur.

Factors Affecting Elasticity Of Demand: 9 Major Factors Explained

Comfort foods, well, defy these various classifications of goods used by economists. Economists may well come up with a new classification for them. The other exception to the rule of people consuming less of something when its price goes up is in the case of luxury goods. This normally happens at an income level altogether different from the one at which people consume Giffen goods. A luxury good can fall within the consumption range of someone only when their income goes up.

However, it has almost no impact on the demand for petrol. In such a case, we will say that the price elasticity for petrol demand is inelastic. However, if this 5% rise causes a massive drop in petrol demand, then price elasticity for petrol demand shall be elastic.

Good use of cross elasticity is to measure the change in demand for coffee to a change in tea price. Price elasticity of demand is a measure of the responsiveness of shoppers to a change in the price of a product. When shut substitutes can be found, the amount demanded is very sensitive to adjustments in the price stage and vice versa. This formulation is also referred to as the cross elasticity of demand. The kind of fine or service impacts the elasticity of demand as well.

More The elasticity of demand and its measurement Questions

This is an essential concept for marketing professionals. And the primary goal for these professionals is to ensure an inelastic demand for the marketed products. Because consumers find it tough to change their behaviors in a short time, they are less likely to act on an increase in the price of a particular commodity. In contrast, long rim demand is more elastic since it is easier to substitute to alternatives if the price of the product rises. The demand for goods like salt, needles, soap, match boxes, and other commodities is often inelastic because consumers spend a tiny fraction of their money on them.

The elasticity of demand, or demand elasticity, refers to how sensitive demand for a good is in comparison with modifications in different financial elements like price or revenue. It is often known as worth elasticity of demand as a result of value is the commonest economic issue used to measure it. One issue that can have an effect on demand elasticity of a good or service is its price stage. For example, the change within the worth stage for a luxury automotive can cause a considerable change in the amount demanded.

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elasticity of demand for comfort goods are

Such goods are required for human survival so their demand does not fluctuate much against a change in their price. A change in price does not always result in the same proportion of change in quantity demanded of a commodity. Manufacturing companies before February 2020 is totally different than that of after May 2020 because of Covid-19 affecting the global economy. The priority of the consumers is about to change drastically.

Elasticity measures the sensitivity of one economic variable against a change in another economic variable. We often hear about demand and supply in economics and also in elasticity. Diversity of Uses – Commodities that can be put to a variety of uses have elastic demand. Whereas if a commodity has only a few uses, its demand is less elastic. If there is a need for something for comfort or survival, people do not have any issue paying higher prices for it.

Cross elasticity of demand measures the responsiveness of demand for one good to a change in the price of the other good. A period of time is always required for the calculation of demand elasticity. It might be a day, a week, a month, a year, or even several years.

What is the elasticity of demand for comfort goods?

When a good or service is a luxury or a comfort good, the demand is highly price-elastic when compared to a necessary good. Conversely, the demand for an essential good, such as food, is generally price-inelastic because consumers still buy food even if the price changes.

In case of price fall, the quantity demanded remains the same resulting in less revenue generation. While in times of price hike businesses earn significant profits. The price elasticity of demand is directly proportional to the time period. This means the elasticity for a shorter time period is always low or it can be even inelastic.

As against this, demand for luxuries is generally more elastic, as they are high price goods, e.g. demand for T.V. However demand for comforts like fan, cooler, radio etc. is generally elastic as a consumer can postpone its consumption. While among these the option is correct, but actually income elasticity of demand in case of luxuries is positive as well as greater than one. What that means is two things – One, if income rises, our consumption of luxury goods also does. Two, the consumption of luxury items rises more than the rise in income, and it falls more than the fall in income. This explains the greater than one elasticity quotient.

So this would possibly look something like that, so I’ll write that as excessive, high elasticity elasticity. And low elasticity can be that your proportion in amount doesn’t change much relying on your p.c change in price. So one may say that we’re gonna think about the determinants of the price elasticity of demand. Price Elasticity of Demand may be defined as the measure of the degree of responsiveness of demand for a commodity to change in its price.

Are necessity goods elastic or inelastic?

Goods that are considered essential have a low elasticity of demand. Electricity, gas, oil, and water are all relatively inelastic because consumers rely on these as necessities rather than luxuries.

Gardening: The Original Self-Help Movement

"If you have a garden and a library, then you have everything you need." -Cicero

I admit I am an avid reader of all things,  and a consumer of endless self-improvement books, business books, and the like. They come in all shapes and sizes, differing perspectives, some faith-based, others not so much; some are applicable, others not so much. Each one has played its part in my journey and, if worthy of repeat visits, has a place on my bookshelf.

In the past few years, I have taken to become a "gardener", not just a landscaper. During one of my many "rescue attempt" sessions (i.e I didn't weed anything for a week and now I have to spend hours trying to undo my laziness) It dawned on me that if one were to spend more time gardening and less time "planning to succeed", all the lessons contained in a collection of personal improvement courses (including the number one self-help book, the Bible) could be grasped.

For example, think how easy it would be to understand the concept, " You reap what you sow" when you plant a carrot seed and, VOILA! a carrot grows. Not a turnip or a clump of lettuce, a carrot. Try planting a cucumber seed with the hope that it will become a sunflower. What disappointment! It is a mere cucumber. Yet, every day, we go about planting seeds, some good and some bad, and we lament that they have not become what we expected. If we plant the seed of order and contentment, that is what we receive. If we plant the seed of gossip, resentment, the contention that is what we receive in return.

It could also be said that if you fail to sow, you will have nothing to reap. I am a planner. I plan everything out as best I can beforehand to avoid as much pain as possible. It's what makes me a good landscape designer but not the greatest gardener. In order to be a great gardener, some planning is in order, but the most important thing you can do to be a successful gardener is to PLANT SOMETHING SO YOU CAN GROW SOMETHING! Thinking about it, charting it out, buying organic and non-GMO seeds, preparing the soil to perfection are all great and necessary. However, if you never actually plant the seed, it will all be for naught.

So if you really want to make the self-improvement journey, set your highlighted book aside for the spring and get out there and:

Grow something and in the process, grow yourself.

Late Spring Frost

This spring has definitely been different, so it should be no surprise that we would have a late Spring frost. Some hardy plants can handle light frosts, others can handle the dips below freezing. Few, however, can remain intact when the temps drop much below 32 degrees.

I recommend covering young plants as best you can, and if you have potted plants, bring them inside, or even under a covered patio or garage.

Here are some materials you could use to cover:

  • Old sheets, drop cloths, tarps, burlap, or newspapers.
  • Cardboard boxes, open them on one end, turn them upside down and place them over your flowers. Tape any cracks to keep out the cold air.
  • Empty pots, buckets, milk jugs with the top cut off, or other containers made of wood, plastic or clay to cover your plants (just be sure they’re tall enough to fit over plants without crushing them.
  • Pre-made row covers (from a gardening store)


  • Place covers over your plants before the temperatures hit freezing. If you’re using plastic covers, wait until twilight to avoid the sun cooking your plants through the plastic.
  • If your cover is lightweight enough to blow away in the wind, weigh it down with rocks or bricks.
  • Remove cardboard or fabric covers as soon as the weather warms up.
  • Remove plastic covers as soon as the sun rises.


No Water Required

With summer fast approaching with its scorching heat, irrigation will become the foremost thought of most gardeners. For those of you on a private well, be cheered to know that your plants should respond well to your watering attempts. Us city dwellers on city water have to deal with chemicals and lack of good stuff to keep our green friends happy.

I find that rainwater produces the lushest and most abundant onset of new growth. Watch your plants after a good soaking and you can almost hear them singing! Well-water comes in a pretty close second. And although this city water perks things up, the plants seem to unfurl almost reluctantly.

If the area you live in is particularly hot and dry, (or you allow it to become that way frequently) try sempervivums and sedums (AKA Hens n Chicks). With the new green roof phenomena re-circulating, the sedums are becoming the new garden darling. They are hardy, don't require a lot of water, and are near impossible to kill (for those of you "black thumb gardeners" out there!).

So grab a mix of these guys to keep your water bill low and your green thumb intact.

pruning rhododendron

What not to prune in March

pruning rhododendronI find this time of year to be one where it is easy to get pruner-happy. While most things can survive a poorly timed pruning, there are a few that will make you skip a year of beauty if you cut at the wrong time.

What can be cut now?

  • old perennial growth
  • dry branches and leaves
  • old grass growth
  • some fruit trees, vines--depending on whether they bloom on year-old wood
  • old flower heads

What to avoid cutting now?

  • Rhododendrons and azaleas: the buds were set in the fall and should only be pruned immediately after they bloom
  • Forsythia -- wait until done blooming
  • Hydrangea macrophylla (mop head hydrangea) -- except to remove old flowers. Wait until new growth comes on before pruning out dead

If in doubt, wait.

Has Spring Already Sprung?

This has got to be one of the most unusual winters i have seen in a while. Barely an inch of snow made an appearance this season and already the plants are preparing for their big debut . . . in February!   As of the last week of February I have found that I have a peach in the fullest of bloom, dill regenerating from last year's fallen seeds and dozens of daffodils and iris' trying to poke through the compacted mulch.

I know in Michigan, my home state, there has been a fear of the short and out-of-the-ordinary cold season. It could result in a reduced or damaged crop this year. But no need to blame global warming. This is just the way things go--cyclical and changing and unaffected by any great human theories.

According to the Richmond International Airport's records, we have been in a cycle of warmest and coldest winters for the entire century. 1889/1890 saw an average temp of 49.8 degrees, while Jan of 1940 saw the coldest temps at -12 degrees. 2011/12 has seen what seems to be high averages in the low 40's but surprisingly only captures the 5th warmest winter on record.

So instead of surmising on the cause of this pleasant gift of early spring, enjoy the signs of hope in anticipation of warmer times to come.

Backyard Design Nokesville

PROJECT: Nokesville New Installation

Landscape Design Concept to Real Life Beautiful

I think one of the best parts about what we do is taking something from ugly to beautiful--from barren and unimaginative to delightful. Unlike some home projects where you can measure and paint and have a pretty good idea of the outcome, landscape design is always a little bit of a mystery. While the design is the beginning of how everything works together, only time will tell whether or not the harmony persists.

This project in Nokesville was done in the spring, following the installation of an in-ground pool. The construction process generally leaves everything around it in need of attention. We essentially started from square one.

The design above laid out the plants. We combined the client's preferences for color and utility to come up with the concepts.

The topsoil had been stripped, exposing red Virginia clay everywhere. We worked with the client to make the space welcoming and lush, adding a variety of textures and blooms for summer color. Sod was installed to stabilize the bare ground after a thorough raking of stones and debris.

All of the stone was acquired from the property itself to create natural and native retaining walls. Deer were a consideration so plants were chosen appropriately.


  • Meet on-site well before you want the work done. It takes times to develop a concept and this first step is important in knowing where you are heading.
  • Take the time to research what you prefer and what you definitely despise. Last thing you want to do is have the design ruined by a key feature that you hate.
  • Do not say, "You are the professional. I defer to you." In the whole scheme of things, that's exactly why you hire us. In the beginning, though, take ownership of the project by communicating your preferences, your ideas and your long term goals for the space you will be addressing.
  • Communicate your long term plan and how you intend to use the space. If you are designing for near-future re-sale, that will elicit a different type of design than one done for longer term pleasure.
  • Supply your designer with any pertinent information regarding the condition of the area. For example, deer, rabbits, shade, dogs, sporting kids, etc. a good designer will ask you those questions, but it is good to be prepared.

Interested in developing a long term plan for your property?

Contact us today to schedule your consultation.

Summer Landscaping Check List

Summer is a great time to hit the re-set button on life.

Your landscaping benefits from a review also. While you are spending time outside, take note of how you are using the property.

  • Are you "outdoorsy" people who love to spend time outside all summer?
  • Do you entertain frequently outside?
  • Are there some neighboring properties that are affecting your privacy?
  • What value can you add for the future sale of your home?

Here is a Summer Check List for your property: Summer Landscaping Check List.

Questions on how to make your property work for your life? Contact us today for a design consultation. We love making your property a place you love to live in.

July: Too Early, Too Late or Just Right?

July is that mid-summer month that comes too late to the party to make the spring planting window, yet too early for a safe entry into fall. It is, however, the perfect time to really appreciate all your earlier labors and to re-evaluate the needs that have yet to be met.


  • DO weed your beds and remove debris to the compost pile
  • DO water every day when rain has not been regular; watch your plants for signs of dehydration in the way of droopiness
  • DO deadhead your perennials and annuals. Geraniums notoriously need attention as do all your spent perennials.
  • DO cut your hydrangeas and zinnias and fill vases throughout the house with fresh flowers.
  • DO freshen up your mulch
  • DO fertilize your plants


  • DO NOT divide plants or transplant
  • DO NOT travel without making property care arrangements

July is also a great time to do a quick mid-summer spruce up to keep your property looking its best for the summer festivities!

HAPPY JULY 4th and beyond!