ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -The law of demand states that a higher price leads to a lower quantity demanded and that a lower price leads to a higher quantity demanded.
Detailed explanation-2: -The ‘Law Of Demand’ states that, all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease, and vice versa. Demand elasticity is a measure of how much the quantity demanded will change if another factor changes.
Detailed explanation-3: -With a downward-sloping demand curve, price and quantity demanded move in opposite directions, so the price elasticity of demand is always negative. A positive percentage change in price implies a negative percentage change in quantity demanded, and vice versa.
Detailed explanation-4: -Law of demand is a fundamental principle of Economics, it states that quantity demanded is always inversely related to the price of the goods. In other words, with increase in price, quantity demanded will be less and vice versa.