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Economics miscellaneous

  1. If the change in demand for a commodity is at a faster rate than change in the price of the commodity, the demand is
    1. perfectly inelastic
    2. elastic
    3. perlectly elastic

    4. inelastic
Correct Option: C

If quantity demanded changes by a very large percentage as a result of a tiny percentage change in price, then the demand is said to be perfectly elastic. It reflects the fact that quantity demanded is extremely responsive to even a small change in price. Technically, the elasticity in this extreme case would be undefined but it approaches negative infinity as demand becomes more elastic.



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