B Elasticity of Demand — Economics STD 12 Commerce / Arts — Question

1. Income elasticity of demand is the proportionate change in quantity demanded of a commodity to a given change in the consumer’s income.
2. Income Elasticity of demand are of three types –
   • Positive Income Elasticity is found in case of Normal Goods.
   • Negative Income Elasticity for inferior goods cheap bread, rice, etc.
   • Zero Income Elasticity.

Cross Elasticity:

1. Cross Elasticity of demand is the proportionate change in the quantity demanded of a commodity to a given change in the price of substitute or complementary goods.
2. Cross Elasticity of demand are of three types –
   • Positive Cross Elasticity is found in case of substitute goods like tea and coffee.
   • Negative Cross Elasticity is seen in case of Complementary Goods.
   • Zero Cross Elasticity in case of unrelated goods like cup and book