Question : Statement 1: The concept of price elasticity of demand measures the responsiveness of quantity demanded to changes in income.
Statement 2: Price elasticity of demand can be calculated by dividing the percentage change in quantity demanded by the percentage change in price.
Option 1: Statement 1 is true, and statement 2 is false.
Option 2: Statement 1 is false, and statement 2 is true.
Option 3: Both statement 1 and statement 2 are true.
Option 4: Both statement 1 and statement 2 are false.
Correct Answer: Statement 1 is false, and statement 2 is true.
Solution : The correct answer is (b) Option B: Statement 1 is false, and statement 2 is true.
Statement 1 is false. The concept of price elasticity of demand measures the responsiveness of quantity demanded to changes in price, not changes in income.
Statement 2 is true. Price elasticity of demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price.
Question : Statement 1: The concept of elasticity of demand measures the responsiveness of quantity demanded to a change in price.
Statement 2: The price elasticity of demand for a good is always positive.
Question : Statement 1: Elasticity of demand measures the sensitivity of quantity demanded to changes in price.
Statement 2: If the percentage change in price is greater than the percentage change in quantity demanded, demand is considered elastic.
Question : Statement 1: When the price of a product increases by 10%, and its quantity demanded decreases by 5%, the price elasticity of demand is - 0.5.
Statement 2: The price elasticity of demand is calculated as the percentage change in quantity demanded divided by the
Question : Statement 1: Price elasticity of demand can be calculated by dividing the percentage change in quantity demanded by the percentage change in price.
Statement 2: The formula for price elasticity of demand is (ΔQ/ΔP) * (P/Q).
Question : Statement 1: Cross elasticity of demand measures the responsiveness of quantity demanded of one good to changes in the price of another good.
Statement 2: Positive cross elasticity of demand indicates that two goods are substitutes.
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