ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The option is not true as, when the price of Toyota increases, as it is a luxury good, it means that the demand for such a good will change more than the price of the good. Thus, the demand for such goods is elastic in nature as the quantity of goods demanded will change more due to changes in price.

Detailed explanation-2: -The price elasticity of demand for a Toyota truck is elastic because there are substitutes for this car. It would be unwise to increase the price for this car in this market because when the price of a Toyota truck increases, the quantity of Toyota trucks demanded decreases. A. Fresh tomatoes are inelastic.

Detailed explanation-3: -Demand for a new car is most likely be elastic as the purchase of new car is dependent on several factors and it can be delayed. The demand for a particular model of car is in turn highly elastic because of the presence of many substitutes.

Detailed explanation-4: -This is because the consumer’s response to a change in price is highly dependent on what alternative they have. When the price of Toyota and Lexus’s car increase, consumers have many alternate car brands they can choose, therefore the quantity demanded is likely to fall substantially.

Detailed explanation-5: -If the demand for new cars is elastic, an increase in price will result in: a decrease in total revenue. If the demand for illegal drugs is inelastic, then a government policy to cause their price to increase would. cause total revenue from drug sales to: rise.