ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Answer and Explanation: If the price elasticity of demand for a good is 0.75, the demand for the good can be described as A. elastic. A good is inelastic if the quantity demanded tends to remain relatively constant despite changes in price.

Detailed explanation-2: -A price increase will therefore increase total revenue while a price decrease will decrease total revenue. Finally, when the percentage change in quantity demanded is equal to the percentage change in price, demand is said to be unit elastic.

Detailed explanation-3: -Normal goods have a positive income elasticity of demand; as incomes rise, more goods are demanded at each price level.

Detailed explanation-4: -The correct answer is option D: 2.1 The value of elasticity greater than 1 implies that demand is ‘elastic’. This means that there will be a greater change in the quantity demanded following a decrease in price. The extent of an increase in quantity demanded would not be proportional to the change in price.