Advertisements
Advertisements
Question
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.
Options
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
Assertion (A) is true but Reason (R) is false.
Assertion (A) is false but Reason (R) is true.
Solution
Assertion (A) is false but Reason (R) is true.
Explanation:
-
Assertion (A) is false: The demand for soap, salt, matches, etc., is not highly elastic; it is highly inelastic. This means price changes have little effect on the quantity demanded because these are essential, everyday items.
-
Reason (R) is true: The demand for these items is highly inelastic because they account for a very small portion of a consumer's income. Because they are necessities, consumers will continue to purchase them even if prices change.
APPEARS IN
RELATED QUESTIONS
How does change in the price of complementary good affect the demand for the given good? Explain with the help of an example.
A 5 percent fall in the price of a good raises its demand from 300 units to 318 units. Calculate its price elasticity of demand.
Explain the effect of the following on the price elasticity of demand of a commodity:
(i) Number of substitutes
(ii) Nature of the commodity
When price of a commodity falls by Rs 1 per unit, its quantity demanded rises by 3 units. Its price elasticity of demand is (−) 2. Calculate its quantity demanded if the price before the change was Rs 10 per unit.
Choose the correct answer :
The account in which the specific amount is deposited per month regularly is known as _________.
Match the following:
|
Group A
|
Group B
|
|
1. Cars and petrol
|
a. Elastic demand
|
|
2. Point method
|
b. Complementary
|
|
3. Necessary goods
|
c. Geometric method
|
|
|
d. Inelastic demand
|
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 nature of a commodity determines its price elasticity of demand. Explain.
When will the demand curve be parallel to x-axis?
Discuss any three/ four factors determining price elasticity of demand.
