ECONOMICS (CBSE/UGC NET)

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ECONOMICS

ELASTICITY OF DEMAND

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
With advances in production technologies in recent years, the production costs of tablet computers () has been substantially reduced. Other things being equal, the price of tablet computers has dropped by 30% and the quantity sold has changed by 50%.This would suggest that within the above price range, there was an ____ tablet computers.
A
elastic demand for
B
inelastic demand for
C
elastic supply of
D
inelastic supply of
Explanation: 

Detailed explanation-1: -If the cost of production rises, corporations will reduce their product supply in order to save money. For example, the cost of manufacturing has increased owing to high labour wages, adverse natural circumstances such as crop failure, as well as increases in raw material prices, taxes, transportation costs, and so on.

Detailed explanation-2: -An improvement in technology that reduces the cost of production will cause an increase in supply. Alternatively, you can think of this as a reduction in price necessary for firms to supply any quantity. Either way, this can be shown as a rightward (or downward) shift in the supply curve.

Detailed explanation-3: -Answer and Explanation: Technological improvements in production is not a determinant of demand. Instead, it affects the supply of a product.

Detailed explanation-4: -A change in the price of a good or service causes a movement along a specific demand curve, and it typically leads to some change in the quantity demanded, but it does not shift the demand curve. The graph on the left lists events that could lead to increased demand.

There is 1 question to complete.
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