Question : Which of the subsequent assertions is untrue: a) Higher elasticity number suggests a greater impact of a change in price on the quantity desired. b) Demand elasticities can only fluctuate between -1 and +1. c) Rectangular hyperbola demand curves will exist for all commodities with unitary elastic demand.
Option 1: A only
Option 2: B only
Option 3: A and C only
Option 4: B and C only
Correct Answer: B only
Solution : The range of the price elasticity is (minus) infinity to zero. Demand is more elastic the closer it is to infinity, and more inelastic the closer it is to zero. Hence option b is the correct option.
Question : Which of the following statements is FALSE? A: All five types of elasticity can be depicted on a linear demand curve.' B: If two demand curves are linear and intersect, the coefficient of elasticity on the different demand curves at the point of intersection
Question : When the price elasticity of demand is greater than 1, the demand is:
Question : When the price elasticity of demand is less than 1, the demand is:
Question : Which of the following factors affects demand elasticity at prices? a) The commodity's nature a) Income status c) The availability of alternatives
Question : If the price elasticity of demand is less than one, then the demand for the goods is said to be ______.
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