Join Sarthaks eConnect Today - Largest Online Education Community!
0 votes
asked in Economics by (33.3k points)

Explain the distinction between Law of Demand and the Elasticity of Demand.

1 Answer

+1 vote
answered by (82.7k points)
selected by
Best answer

Demand of goods changes due to change in price of the goods but changes in demand are not uniform in all cases. Law of Demand is only a ‘ Qualitative statement ‘ as it does not explain the quantity of change in demand due to change in price. It only explains the direction of the change. ‘ Elasticity of Demand ‘ is an effort by economist to present law of demand in form of ‘ Quantitative statement ‘. We can say that, other things being equal, elasticity of demand expresses change in quantity of demand relative to change in price of goods. Points of difference between Law of Demand and Elasticity of Demand are :

(a) Law of demand is a ‘ qualitative statement ‘ which expresses the change in direction of demand due to change in price of the goods while elasticity of demand is a ‘ Quantitative statement’ which measures the quantitative change in demand of goods due to price change.

(b) Law of Demand in general conditions, indicates inverse relation between price of goods and demand for it while elasticity of demand can be Positive or negative.

(c) Law of Demand expresses only price demand relationship, while elasticity of demand can also measure change in income, related goods, etc.

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.

One Thought Forever

“There is a close connection between getting up in the world and getting up in the morning.“
– Anon