ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -So, if the price of a good increases by 10 percent and the quantity demanded decreases by only 5 percent, that good is said to have inelastic demand.

Detailed explanation-2: -When the price of commodity C rises by 10%, the quantity demanded falls by (2) 18%. This is an example of : (a) perfectly elastic demand.

Detailed explanation-3: -When demand is unit elastic, a 10 percent change in the price of the good will cause a change in quantity demanded equal to 10 percent. Unit elastic is condition when price elasticity of demand is 1. The % change in price will cause similar % change in quantity demanded.

Detailed explanation-4: -The price elasticity is unitary elastic equal to 1, which means the percentage change in demand will be the same as a percentage change in price. Hence, a 10% decrease in demand will occur with a 10% increase in price.