Question : Assertion (A): Demand elasticity is greater than one below the demand curve's midpoint on a straight line with a downward slope. Reason (R): The demand elasticity on a linear demand curve ranges from zero to infinity.
Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
Option 3: Assertion (A) is true but Reason (R) is False
Option 4: Assertion (A) is False but Reason (R) is True
Correct Answer: Assertion (A) is False but Reason (R) is True
Solution : Below the midpoint of a straight line demand curve, elasticity is less than one and the firm wants to raise the price to increase total revenue. Above the midpoint, elasticity is greater than one and the firm wants to lower price to increase total revenue. At the midpoint, E1, elasticity is equal to one, or unit elastic. Hence option d is the correct answer.
Question : Assertion (A): Demand elasticity is greater than one below the demand curve's midpoint on a straight line with a downward slope. Reason (R): The elasticity of demand on a linear demand curve ranges from 0 to infinity.
Question : Assertion(A): Demand elasticity is greater than one below the demand curve's midpoint on a straight line with a downward slope.
Reason(R): The range of demand elasticity on a linear demand curve is zero to infinity.
Question : Assertion (A): The price-demand curve has a downward slope. Reason (R): Inverse relationship between price and demand is stated by the law of demand, holding all other parameters constant.
Question : Assertion (A): The demand curve for the market is flatter than the demand curve for an individual.
Reason (R): By horizontally summing individual demand, the market demand curve is created.
Question : Assertion (A): Demand elasticity is higher for durable commodities. Reason (R): Once durable items are in high demand now, their demand can be delayed.
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