Question

Assertion (A): The elastic demand curve for luxuries is flatter than normal.

Reason (R): The coefficient of Elasticity ranges between 0 and 1.

Options

• Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of the Assertion (A).

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of the Assertion (A)

• Assertion (A) is true, but Reason (R) is false

• Assertion (A) is false, but Reason (R) is true

Answer 1

Assertion (A) is true, but Reason (R) is false

Explanation:

Because the coefficient of elasticity is always greater than one, the elastic demand curve for luxury is flatter than normal. As a result, the argument is incorrect because the coefficient of elasticity spans from 0 to 1. The statement is correct.