Advertisements
Advertisements
Question
When the price elasticity of demand for a good equals ______.
Options
0, the demand cure is horizontal
1, the demand curve is vertical
1, the demand curve is horizontal
0, the demand curve is vertical
Advertisements
Solution
When the price elasticity of demand for a good equals 0, the demand curve is vertical.
Explanation:
When the price elasticity of demand for a good equals 0, the demand curve is vertical, indicating that the quantity demanded does not change regardless of the price. This situation represents perfectly inelastic demand.
APPEARS IN
RELATED QUESTIONS
Explain the effect of the following on the price elasticity of demand of a commodity:
(i) Number of substitutes
(ii) Nature of the commodity
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 |
State whether the following statement is true or false :
Concept of ‘elasticity of demand’ is useful for the finance minister.
Choose the correct answer :
Demand of electricity for domestic purpose is _________.
Elasticity of demand for two goods A and B is -2 and -3 respectively. Then good A has higher elasticity.
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.
Explain briefly the factors on which elasticity of demand depends.
Comment upon the shape of the demand curve, if Ed = 0.
Discuss any three/ four factors determining price elasticity of demand.
Which of the following correctly describes the relationship between availability of substitutes and price elasticity of demand?
