Define Elasticity of Demand. Explain nature of elasticity of demand of forestry products with respect to other products/commodities and also mention its practical importance.

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Define Elasticity of Demand. Explain nature of elasticity of demand of forestry products with respect to other products/commodities and also mention its practical importance

Define Elasticity of Demand. Explain nature of elasticity of demand of forestry products with respect to other products/commodities and also mention its practical importance.

We know that according to the law of demand if the price falls; demand expands and vice verse. 
Here the law of demand tells us the changes in quantity demanded in response to change in price, but it does not tell us the extent of changes in quantity demanded or that how much change has been occurred. 

To know the extent of changes in quantity demanded the economist used the concept of elasticity of demand.

The elasticity of demand is used to measure the effect of changes in price on quantity demanded or the rate of change in demand in response to changes in price. According to economic theory, every commodity does not have same elasticity. Some commodities are more elastic and some less elastic.

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Elasticity of demand of Forestry products
Forestry provides several goods and services to the people which include timber, fuelwood, forages for cattle, grasses, Medicinal plants, different fruits etc.
*    Timber whose substitute are available in the market so it is more elastic.
*    Fuelwood in rural area and some far-flung areas substitute are not available is less elastic.
*    Grasses and forages have also substituted in agriculture products so it is elastic.
*    Medicinal Plants have no substitute it is less elastic.
*    Pulp & paper have no substitute it is less elastic.  

Elasticity of demand for agriculture products
Flour, food items without which we cannot survive e.g. flour, Bread, ghee, Cloths, egg, Tobacco products have less elastic. These are the necessity of life and elasticity of demand for that products is less than one. On the other hand Fruits, Vegetables, have elastic demand.
·       Demand for luxuries goods is elastic.
·       Demand for goods having many closed substitute will be elastic.
Practical applications of elasticity of demand.
1.     Guidance to finance ministers.
2.    Guidance for entrepreneurs and producers.
3.    Guidance for monopolists.
4.    Guidance for fair determination in the finance sector.
5.     Helpful in foreign exchange earnings.
6.    Excess production of certain goods.
7.  Devaluation of currency.
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For Correction and Improvements please use the comments section below. 

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Naeem Javid Muhammad Hassani

NJMH is working as Deputy Conservator of Forests in Balochistan Forest & Wildlife Department (BFWD). He is the CEO of Tech Urdu (techurdu.net) Forestrypedia (forestrypedia.com), Majestic Pakistan (majesticpakistan.pk), All Pak Notifications (allpaknotifications.com), Essayspedia, etc & their YouTube Channels). He is an Environmentalist, Blogger, YouTuber, Developer & Vlogger.

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