ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Thus, the answer is (d). A 10 percent increase in the price will cause a 5 percent decrease in the quantity demanded.

Detailed explanation-2: -If the elasticity of supply is 0.5, then a 10% decrease in price will result in a 5% increase in quantity supplied.

Detailed explanation-3: -And the inelastic demand is the change in demand is small due to the change in price. Here we can see that the price falls by 5% and the demand increases by 6% so we cans ay that the demand is elastic. Hence, the correct answer is “elastic".

Detailed explanation-4: -Answer and Explanation: The correct answer choice is B. Demand is said to be price elastic when the value of price elasticity is greater than one. Here, the given percentage change in quantity demanded is 15, while the given percentage change in price is 10 implying that the price elasticity of demand is 1.5.

Detailed explanation-5: -As a rule of thumb, if the quantity of a product demanded or purchased changes more than the price changes, then the product is considered to be elastic (for example, the price goes up by 5%, but the demand falls by 10%).