ECONOMICS
TECHNOLOGY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Inelastic
|
|
|
Elastic
|
|
|
Shortage
|
|
|
Surplus
|
Detailed explanation-1: -An elastic good is defined as one where a change in price leads to a significant shift in demand and where substitutes are available for an item, the more elastic the good will be.
Detailed explanation-2: -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-3: -Answer and Explanation: Option B (percentage change in quantity demanded is greater than the percentage change in price.) is correct.
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.
Detailed explanation-5: -Price Elasticity of Demand (PED) Cross Elasticity of Demand (XED) Income Elasticity of Demand (YED) Price Elasticity of Supply (PES) 09-Dec-2020