Question

Find the odd word.

Types of elasticity of demand

Options

• Unitary elasticity

• Income elasticity

• Cross elasticity

• Price elasticity

Answer 1

Unitary elasticity

Explanation:

• Income elasticity, cross elasticity, and price elasticity are types of elasticity of demand, each measuring the responsiveness of demand to different factors:
  • Income elasticity: change in demand due to change in income.
  • Cross elasticity: change in demand due to change in the price of related goods.
  • Price elasticity: change in demand due to change in the good’s own price.
• Unitary elasticity is not a type but a degree or value of price elasticity (specifically when elasticity equals 1).