ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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ELASTIC
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INELASTIC
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Either A or B
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None of the above
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Detailed explanation-1: -The price elasticity of demand is calculated by dividing the percentage change in quantity demanded by the percentage change in price. If the quotient is greater than or equal to one, the demand is considered to be elastic. If the value is less than one, demand is considered inelastic.
Detailed explanation-2: -As it is usually measured, automobile travel is inelastic, meaning that a percentage price change causes a proportionally smaller change in vehicle mileage. For example, a 10% fuel price increase only reduces automobile use by about 1% in the short run and 3% over the medium run.
Detailed explanation-3: -Petrol – petrol has few alternatives because people with a car need to buy petrol. For many driving is a necessity. Salt. A good produced by a monopoly. Tap water. Diamonds. Peak rail tickets. Cigarettes. Apple iPhones, iPads. 04-May-2019