Advertisements
Advertisements
Question
If a good takes up a significant share of consumers' budget, its demand will be ______.
Options
Less elastic
Highly elastic
Unitary elastic
Perfectly elastic
Advertisements
Solution
If a good takes up a significant share of consumers' budget, its demand will be highly elastic.
Explanation:
If a good consumes a significant portion of the consumer budget, it implies that it cannot be a necessary comfort or jointly demanded good.
APPEARS IN
RELATED QUESTIONS
A consumer spends Rs 1000 on a good priced at Rs 8 per unit. When price rises by 25 percent, the consumer continues to spend Rs 1000 on the good. Calculate the price elasticity of demand by percentage method.
Explain any 'two methods' of measuring price elasticity of demand.
Define or explain the following concept.
Unitary elastic demand.
What do you mean by an ‘inferior good’? Give some examples.
What do you mean by complements? Give examples of two goods which are complements of each other.
Give reason or explain the following statement.
All desires are not demand.
State whether the following statement is TRUE and FALSE.
Unitary Elastic Demand rarely occurs in practice.
Write short answer for the following question :
Total outlay method of measuring price elasticity of demand.
What is meant by elastic demand?
Which statement about the law of demand and elasticity of demand is true?
