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Which of the following diagram correctly depicts the situation of Less Elastic Demand?

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Question

Which of the following diagram correctly depicts the situation of Less Elastic Demand?

Options

  • The diagram shows a horizontal demand curve DD, indicating perfectly elastic demand (Ed = ∞), where quantity demanded changes from OQ₁ to OQ₂ at the same price OP.

  • The diagram shows a vertical demand curve DD, indicating perfectly inelastic demand (Ed = 0), where quantity demanded remains constant at OQ despite changes in price from OP₁ to OP₂.

  • The diagram shows a downward-sloping demand curve DD, indicating highly elastic demand (Ed > 1), where a fall in price from OP to OP₁ causes a proportionately greater increase in quantity demanded from OQ to OQ₁.

  • The diagram shows a downward-sloping demand curve DD, indicating highly elastic demand (Ed > 1), where a fall in price from OP to OP₁ causes a proportionately greater increase in quantity demanded from OQ to OQ₁.

MCQ
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Solution

The diagram shows a downward-sloping demand curve DD, indicating highly elastic demand (Ed > 1), where a fall in price from OP to OP₁ causes a proportionately greater increase in quantity demanded from OQ to OQ₁.

Explanation:

The answer key identifies diagram (c). The horizontal and vertical diagrams represent perfectly elastic and perfectly inelastic demand, respectively; the provided descriptions for (c) and (d) appear identical, but the source key marks (c).

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Chapter 4: Elasticity of Demand - OBJECTIVE QUESTIONS [Page 4.39]

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Sandeep Garg Introductory Microeconomics [English] Class 11
Chapter 4 Elasticity of Demand
OBJECTIVE QUESTIONS | Q 23. | Page 4.39
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