ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -When the value of elasticity is greater than 1.0, it suggests that the demand for the good or service is more than proportionally affected by the change in its price. A value that is less than 1.0 suggests that the demand is relatively insensitive to price, or inelastic.

Detailed explanation-2: -If the formula creates an absolute value greater than 1, the demand is elastic. In other words, quantity changes faster than price. If the value is less than 1, demand is inelastic.

Detailed explanation-3: -It is the responsiveness quantity to a change in price of a good. For most goods, it is negative since demand varies inversely with price. Elasticity below 1 is classified as relatively inelastic, while above 1 is relatively elastic.

Detailed explanation-4: -Demand for a good is said to be inelastic when the elasticity is less than one in absolute value: that is, changes in price have a relatively small effect on the quantity demanded. Demand for a good is said to be elastic when the elasticity is greater than one.

Detailed explanation-5: -A-0.5-income elasticity means that demand is relatively inelastic. This happens in the case of a good that needs to be bought regardless of price.