ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Out of all the given options, the demand for automobiles provides the widest choice for the consumer. The other options are niche options that will not have an equally elastic demand.

Detailed explanation-2: -For example, non-essential goods have a high elasticity of demand, while essential goods or consumer staples have a low elasticity of demand. Factors that affect the price elasticity of demand include the availability of competitive substitutes and the brand recognition of products.

Detailed explanation-3: -Demand for a new car is most likely be elastic as the purchase of new car is dependent on several factors and it can be delayed. The demand for a particular model of car is in turn highly elastic because of the presence of many substitutes.

Detailed explanation-4: -The answer is B: Honda automobile. The demand curve for the Honda automobile is elastic because an increase in the automobile’s price declines the quantity demanded.

Detailed explanation-5: -When a good or service is a luxury or a comfort good, the demand is highly price-elastic when compared to a necessary good.