Definition: The Law of Supply posits that there is a positive relationship between the supply of a commodity and its price, such that the supply of the commodity increases with the increase in its price and decreases with the fall in its price, other things remaining constant. Here, “other things” are the factors that influence the supply of the commodity such as technology, … [Read more...] about Law of Supply

## Determinants of Elasticity of Demand

Definition: The Elasticity of Demand is a measure of sensitiveness of demand to the change in the price of the commodity. Determinants of Elasticity of Demand Apart from the price, there are several other factors that influence the elasticity of demand. These are: Consumer Income: The income of the consumer also affects the elasticity of demand. For high-income … [Read more...] about Determinants of Elasticity of Demand

## Types of Price Elasticity of Demand

Definition: The Price Elasticity of Demand is commonly known as the elasticity of demand, which refers to the degree of responsiveness of demand to the change in the price of the commodity. Types of price Elasticity of Demand The following are the main types of price elasticity of demand: Perfectly Elastic Demand (Ep = ∞): The demand is said to be perfectly elastic … [Read more...] about Types of Price Elasticity of Demand

## Types of Elasticity of Demand

Definition: The Elasticity of Demand measures the percentage change in quantity demanded for a percentage change in the price. Simply, the relative change in demand for a commodity as a result of a relative change in its price is called as the elasticity of demand. Types of Elasticity of Demand Price Elasticity of Demand: The price elasticity of demand, commonly known … [Read more...] about Types of Elasticity of Demand

## Elasticity of Demand

Definition: The Elasticity of Demand is a measure of change in the quantity demanded in response to the change in the price of the commodity. Simply, the effect of a change of price on the quantity demanded is called as the elasticity of demand. Marshall, a renowned economist, has suggested a mathematical method to measure the elasticity of demand: According to this … [Read more...] about Elasticity of Demand

## Law of Demand

Definition: The Law of Demand asserts that there is an inverse relationship between the price, and the quantity demanded, such as when the price increases the demand for the commodity decreases and when the price decreases the demand for the commodity increases, other things remaining unchanged. In the definition, the “other things” are the factors that influence the demand … [Read more...] about Law of Demand

## Types of Demand

Definition: The Demand for a product refers to the quantity of goods and services that the consumers are willing to buy at a particular price for a given point of time. Types of Demand The demand can be classified on the following basis: Individual Demand and Market Demand: The individual demand refers to the demand for goods and services by the single consumer, … [Read more...] about Types of Demand

## Demand Analysis

Definition: The Demand Analysis is a process whereby the management makes decisions with respect to the production, cost allocation, advertising, inventory holding, pricing, etc. Although, how much a firm produces depends on its production capacity but how much it must endeavor to produce depends on the potential demand for its product. Thus, the marketer is required to … [Read more...] about Demand Analysis

## Chi-Square Test

Definition: The Chi-Square Test is the widely used non-parametric statistical test that describes the magnitude of discrepancy between the observed data and the data expected to be obtained with a specific hypothesis. The observed and expected frequencies are said to be completely coinciding when the χ2 = 0 and as the value of χ2 increases the discrepancy between the … [Read more...] about Chi-Square Test

## Chi-Square Distribution

Definition: The Chi-Square Distribution, denoted as χ2 is related to the standard normal distribution such as, if the independent normal variable, let’s say Z assumes the standard normal distribution, then the square of this normal variable Z2 has the chi-square distribution with ‘K’ degrees of freedom. Here, K is the sum of the independent squared normal variables. The … [Read more...] about Chi-Square Distribution