#BSE Nifty

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TVS Supply Chain Solutions stock jumps 9% after company secures 5-year contract with Daimler Truck AG

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[jedarar]

Sector to focus

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Sensex, Nifty Rebound After Days Of Downtrend; Rally In Blue-Chip Stocks

Mumbai: Equity benchmark indices Sensex and Nifty bounced back on Tuesday after days of downtrend on value-buying at lower levels and rally in blue-chip stocks HDFC Bank, Tech Mahindra and M&M. Continuous buying by domestic institutional investors also supported the indices, traders said. Snapping its four days of decline, the BSE benchmark Sensex climbed 239.37 points or 0.31 per cent to settle…

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(via Support and Resistance Calculator RW)

[rightnewshindi]

709 अंक गिरा बीएसई सेंसेक्स, एनएसई निफ्टी 189 अंक गिरकर हुआ ओपन; जानें एक्सपर्ट की राय

Stock Market Today 4 September 2024: शेयर बाजार में आज बुधवार का दिन भी कुछ खास नजर नहीं आ रहा है। मंगलवार की सुस्ती के बाद आज बीएसई सेंसेक्स और एनएसई निफ्टी में शुरुआती कारोबार में ही बड़ी गिरावट देखी गई। तीस शेयरों पर आधारित बीएसई सेंसेक्स 709.94 अंक लुढ़ककर 81,845.50 पर खुला। वहीं, एनएसई निफ्टी 189.9 अंक (-0.75%) गिरकर 25,089.95 पर ओपन हुआ। बता दें कि मंगलवार को सेंसेक्स सपाट बंद हुआ था तो…

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Stocks to buy today-

1] ADSL: Buy at ₹182.70, target ₹192, stop loss ₹175; & 2] Mahindra Logistics: Buy at ₹525, target ₹550, stop loss ₹505; 3] OCCL: Buy at ₹810, target ₹850, stop loss ₹780; 4] Canara Bank: Buy at ₹119, target ₹126, stop loss ₹115; 5] Indian Terrain Fashions: Buy at ₹75.40, target ₹79, stop loss ₹72.75; 6] Vardhman Holdings: Buy at ₹4043.35, target ₹4250, stop loss ₹3900.

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Price Elasticity of Demand

In the ever-evolving world of economics, the concept of price elasticity of demand is a fundamental principle that profoundly influences market pricing strategies. Whether you’re a student just dipping your toes into economics or a business owner looking to optimize pricing strategies, understanding the price elasticity of demand can provide valuable insights into consumer behavior and how it impacts the market. This guide aims to break down the concept simply, and digestibly, shedding light on its importance and practical applications.

What Is Price Elasticity of Demand?

Price elasticity of demand (PED) measures how sensitive the quantity demanded of a good or service is to a change in its price. It tells us how consumers react when the price of something they purchase regularly increases or decreases.

Imagine you have a favorite brand of coffee. If the price suddenly increases by 20%, how would you respond? Would you continue buying it as usual, switch to a cheaper alternative, or cut back on coffee altogether? The extent of your reaction—whether you buy significantly less, the same amount, or stop buying altogether—reflects the price elasticity of demand for that coffee.

The Formula for Price Elasticity of Demand

To calculate PED, economists use a specific formula:

Price Elasticity of Demand = Percentage Change in Quantity Demanded​/Percentage Change in Price

If the resulting value is greater than 1, demand is considered elastic, meaning consumers are highly responsive to price changes. If it’s less than 1, demand is inelastic, meaning consumers are less responsive to price changes. A value of exactly 1 indicates unitary elasticity, where the percentage change in quantity demanded is exactly proportional to the percentage change in price.

Factors Influencing Price Elasticity of Demand

Several factors can influence how elastic or inelastic the demand for a product is:

Substitute Goods: If there are readily available substitutes for a product, demand tends to be more elastic. For example, if the price of your favorite brand of coffee increases, you might easily switch to another brand or start brewing your coffee at home.

Necessity vs. Luxury: Necessities tend to have inelastic demand, while luxury goods are often more elastic. People will continue to buy essentials like milk or electricity even if prices rise, but they might forgo luxury items like high-end electronics if prices increase significantly.

Proportion of Income: If a product takes up a large portion of a consumer’s income, its demand is likely to be more elastic. A significant price increase in a major purchase, like a car, can lead consumers to delay the purchase or seek alternatives.

Time Horizon: Over time, consumers can adjust their behavior, making demand more elastic in the long run. In the short term, people may be less responsive to price changes because they need time to find alternatives.

Types of Price Elasticity of Demand

Understanding the different types of price elasticity can help businesses and policymakers make informed decisions:

Elastic Demand (PED > 1): A small price change leads to a large change in quantity demanded. Luxury items often fall into this category.

Inelastic Demand (PED < 1): Price changes have a minimal effect on the quantity demanded. Essential goods and services usually exhibit inelastic demand.

Unitary Elasticity (PED = 1): The percentage change in quantity demanded equals the percentage change in price. This is more of a theoretical concept, as real-world examples are rare.

Perfectly Elastic Demand (PED = ∞): Any increase in price causes the quantity demanded to drop to zero. This is an extreme case, usually seen in highly competitive markets.

Perfectly Inelastic Demand (PED = 0): Quantity demanded remains constant, regardless of price changes. This is also rare, typically involving absolute necessities with no substitutes.

How Price Elasticity of Demand Affects Market Pricing

Price elasticity of demand plays a crucial role in how businesses set prices and how markets function. Here’s how:

Pricing Strategies: Companies need to understand the elasticity of their products to set optimal prices. For elastic products, a small price increase might lead to a significant drop in sales, while for inelastic products, companies can raise prices with less risk of losing customers.

Revenue Implications: The relationship between price changes and total revenue depends on demand elasticity. For elastic demand, increasing prices may lead to a decrease in revenue, while for inelastic demand, higher prices could boost revenue.

Market Competition: In competitive markets with many substitutes, demand tends to be more elastic. Companies in such markets must carefully consider pricing strategies to maintain market share.

Consumer Behavior: Understanding elasticity helps businesses predict how consumers might respond to price changes, allowing for more strategic planning. For example, during economic downturns, consumers may become more price-sensitive, making demand more elastic.

Policy Decisions: Governments and policymakers also consider price elasticity when implementing taxes or subsidies. For instance, higher taxes on tobacco products are often justified by the inelastic demand for cigarettes, aiming to reduce consumption despite price increases.

Practical Applications and Real-World Examples

Technology Products: The demand for smartphones is highly elastic. Consumers are sensitive to price changes because numerous alternatives are available, and technology evolves rapidly, making older models less attractive.

Pharmaceuticals: Prescription drugs often exhibit inelastic demand because they are essential, and there are few substitutes. Patients are likely to continue purchasing necessary medication even if prices rise.

Transportation: Public transportation tends to have inelastic demand, especially in urban areas where alternatives like walking or cycling may be limited. Price increases in bus or train fares might not lead to a significant drop in ridership.

Price elasticity of demand is a powerful tool in understanding consumer behavior and its impact on market pricing. Whether you’re a business owner setting prices, a policymaker crafting economic regulations, or a consumer trying to make informed purchasing decisions, grasping this concept can provide invaluable insights.

By considering the factors that influence elasticity and the different types of demand, you can better navigate the complexities of the market, making decisions that align with your economic goals. So, the next time you encounter a price change, think about how it might affect demand—and remember, the principles of price elasticity are at play, guiding the market’s invisible hand.

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[todayworldnews2k21]

Sensex, Nifty Fall Over 1%, Snap Two-day Rally Ahead Of US Fed Interest Rate Decision

Mumbai: Benchmark Sensex and Nifty tumbled more than 1 per cent on Thursday after a two-day rally as investors remained on the sidelines ahead of the US Federal Reserve interest rate decision and unabated foreign fund outflows. The BSE Sensex tanked 836.34 points or 1.04 per cent to settle at 79,541.79. During the day, it slumped 958.79 points or 1.19 per cent to 79,419.34. The NSE Nifty dropped…

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Market Watch: Stock Market News! #financialmarkets #stockmarket #update .

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The Indian equity markets commenced the week with a positive start on Tuesday, extending the rally from the previous session's record highs. The benchmark indices, BSE Sensex and Nifty50, opened in the green, indicating continued investor optimism.

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Bajaj Housing Finance: क्या आपको मौजूदा भाव पर बजाज फाइनेंस के शेयर में निवेश करना चाहिए?

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