ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Milk
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Petrol
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Insulin
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Baked Beans
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Detailed explanation-1: -The cost of production cannot affect the elasticity of demand because it is considered a factor that affects the elasticity of supply. When the price of a particular product is increased, it will also increase its production cost.
Detailed explanation-2: -Answer and Explanation: The correct answer is option d-elasticity is equal to the slope of the demand curve.
Detailed explanation-3: -Answer and Explanation: The correct answer is: c. Demand is elastic. Along a linear demand curve, the price elasticity of demand changes from point to point.
Detailed explanation-4: -The four factors that affect price elasticity of demand are (1) availability of substitutes, (2) if the good is a luxury or a necessity, (3) the proportion of income spent on the good, and (4) how much time has elapsed since the time the price changed.