Question : Assertion (A): Demand elasticity is higher for durable commodities.
Reason (R): Demand for durable goods can be postponed once they are demanded at present.
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:
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation
of Assertion (A).
Solution :
In the field of economics, durable goods are those that continue to provide consumers with services for a number of years to come. Additionally, they can be kept in storage for longer periods of time due to their durability. The reason why customers' desire for durable items is more volatile, or that it varies greatly, is because they are used for relatively long periods of time.
The price elasticity of demand for durable goods is generally more elastic in the short run than in long run.
Hence option a is the correct answer.
