Match List I with List II
| List I | List II | ||
| A. | Price changes but no change in demand | I. | Perfectly elastic $e_p=\alpha $ |
| B. | Price remains same but demand changes | II. | Unit elastic $e_p=1$ |
| C. | Price and demand changes in same proportion | III. | More than elastic $e_p=< 1$ |
| D. | Price changes in less proportion than Demand | IV. | Perfectly inelastic $e_p = 0$ |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 1
The correct answer is option (1) : A-IV, B-I, C-II, D-III
| List I | List II | ||
| A. | Price changes but no change in demand | IV.Perfectly inelastic $e_p = 0$ | |
| B. | Price remains same but demand changes | I.Perfectly elastic $e_p=\alpha $ | |
| C. | Price and demand changes in same proportion | II.Unit elastic $e_p=1$ | |
| D. | Price changes in less proportion than Demand | III.More than elastic $e_p=< 1$ | |
Perfect inelasticity refers to a situation in which the quantity demanded does not change at all, regardless of the price. Perfect elasticity refers to a situation in which the quantity demanded is extremely sensitive to changes in price, with even a small change in price leading to a large change in quantity demanded.
Unit elastic supply is referred to as a supply that is perfectly responsive to price changes. In other words, any change in the price of a good with unit elastic supply results in an equally proportional change in quantity supplied.
Perfect elasticity refers to a situation in which the quantity demanded is extremely sensitive to changes in price. Market price remains constant, whatever be the level of demand for the commodity. At any other price, quantity demanded drops to zero and therefore ed = ∞ . with even a small change in price leading to a large change in quantity demanded.
When the percentage change in quantity demanded is less than the percentage change in market price, eD is estimated to be < 1 and the demand for the good is said to be inelastic at that price. Demand for essential goods is often found to be inelastic.