Question

True or False with Reason:

Commodity with diverse uses has generally less elastic demand.

Answer 1

This statement is false.

Explanation:

• A commodity with diverse uses, such as electricity, can be put to many different uses.
• When its price falls, demand increases substantially because it is used even for less urgent purposes; when price rises, demand falls as only urgent uses are served.
• Therefore, commodities with diverse uses have more elastic demand, not less elastic demand.