GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Price of a product falls by 10% and its demand rises by 30%. The elasticity of demand is:
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1. 1%
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2.5%
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3. 3
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4. 1
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Explanation:
Detailed explanation-1: -Answers. Price of a product falls by 10% and its demand rises by 30%. The elasticity of demand is 3.
Detailed explanation-2: -Solution(By Examveda Team) The elasticity of demand is 3.
Detailed explanation-3: -So, if the price of a good increases by 10 percent and the quantity demanded decreases by only 5 percent, that good is said to have inelastic demand.
Detailed explanation-4: -Elasticity of demand = (-) % change in quantity demanded/% change in price = (-)12%/5% = (-)2.4. Was this answer helpful?
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