ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Answer and Explanation: The correct answer choice is d. Supply is inelastic. The supply is considered price elastic when the percentage change in quantity supplied is less compared to the percentage change in price.

Detailed explanation-2: -If the response is exactly equal to 1 percent, the demand is said to be unitary, where a 1-percent decrease in price results in a 1-percent increase in demand. The higher the price elasticity, the more sensitive consumer demand is to price changes.

Detailed explanation-3: -An elastic demand is one in which the change in quantity demanded due to a change in price is large. An inelastic demand is one in which the change in quantity demanded due to a change in price is small. If the formula creates an absolute value greater than 1, the demand is elastic.

Detailed explanation-4: -For a product with inelastic supply, the amount supplied does not significantly change as the price of an item rises or falls. Typically, inelastic describes goods where the change in demand or supply is smaller than the difference in the price of the goods.

Detailed explanation-5: -Inelastic goods are often described as necessities. A shift in price does not drastically impact consumer demand or the overall supply of the good because it is not something people are able or willing to go without. Examples of inelastic goods would be water, gasoline, housing, and food.