ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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For much of the world rice is a staple food. If the world price of rice increases by 10%, what is the likely percentage change in quantity demanded?
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Fall by 12%
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Fall by 5%
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Fall by 10%
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Fall by 20%
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Explanation:
Detailed explanation-1: -A. The demand is inelastic when the percentage change in quantity demanded is less than the percentage change in price.
Detailed explanation-2: -Answer and Explanation: The correct answer is c. The income elasticity is 0.4 and the good is a normal good. The good is a normal good because demand rises as income rises.
Detailed explanation-3: -Answers. Price of a product falls by 10% and its demand rises by 30%. The elasticity of demand is 3.
Detailed explanation-4: -When the price of a product is increased 10 percent, the quantity demanded decreases 15 percent. In this range of prices, demand for this product is: elastic.
There is 1 question to complete.