Advertisements
Advertisements
Question
Elasticity of demand for two goods A and B is -2 and -3 respectively. Then good A has higher elasticity.
Options
True
False
Advertisements
Solution
This statement is False.
Explanation:
Good B has a higher elasticity because -3 (the elasticity of demand for good B) is more elastic than -2 (the elasticity of demand for good A). The more negative the elasticity value, the more elastic the demand is.
APPEARS IN
RELATED QUESTIONS
Match the following :
| Group 'A' | Group 'B' |
| (a) Demand and price | (1) wages |
| (b) Perfectly elastic supply | (2) Vertical supply curve |
| (c) Land | (3) Transfer income |
| (d) Unemployment allowance | (4) Horizontal supply curve |
| (e) Reserve Bank of India | (5) Inverse relation |
| (6) Rent | |
| (7) 1935 | |
| (8) Direct relation |
Write Short note on the following.
Ratio method of measuring price elasticity of demand ?
Choose the correct answer :
Perfectly elastic demand curve is _________.
The coefficient of price elasticity of demand for Good X is (−) 0.2. If there is a 5% increase in the price of the good, by what percentage will the quantity demanded for the good fall?
The government wants to reduce the consumption of good by 10%. The price elasticity of demand for elasticity is -0.4. The government should raise the price of elasticity by ______.
What is the implication of a vertical demand curve?
Assertion (A): The demand for soap, salt, matches etc. is highly elastic.
Reason (R): The demand for soap, salt, matches etc. is highly inelastic because the consumer spends a very small amount of expenditure in relation to his/her income.
The nature of a commodity determines its price elasticity of demand. Explain.
Which of the following correctly describes the relationship between availability of substitutes and price elasticity of demand?
Which statement correctly describes the relationship between postponement and price elasticity?
