Question : Assertion: Elasticity of supply measures the responsiveness of quantity supplied to changes in price.
Reason: Elastic supply occurs when producers are less responsive to changes in price.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Solution : The correct answer is (a) Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
The assertion is true. Elasticity of supply is a measure of how the quantity supplied of a good or service changes in response to a change in price. It quantifies the degree to which producers are willing and able to adjust the quantity supplied when there is a change in price.
The reason provided is a correct explanation of the assertion. When supply is elastic, producers are more responsive to changes in price, meaning that they can adjust the quantity supplied significantly in response to price changes. In contrast, when supply is inelastic, producers are less responsive to price changes, and the quantity supplied does not vary substantially.
Therefore, the correct answer is (a) Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Question : Assertion: Inelastic demand means that the quantity demanded is not responsive to changes in price.
Reason: Inelastic demand occurs when consumers are highly sensitive to price changes.
Question : Assertion: The law of supply states that as the price of good increases, the quantity supplied of that good also increases.
Reason: The law of supply is based on the positive relationship between price and quantity supplied, assuming other factors remain constant.
Question : Assertion: Decentralization improves organizational agility and responsiveness.
Reason: It involves a hierarchical approach to decision-making.
Question : Assertion: The concept of elasticity of demand is only applicable to individual consumers.
Reason: Elasticity of demand measures the responsiveness of quantity demanded to changes in price.
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