Practicing Success
Arrange the following degrees of elasticity on a linear demand curve in the descending order. (A) $e_d> 1$ (B) $e_d=1$ (C) $e_d< 1$ (D) $e_d=0 $ Choose the correct answer from the options given below : |
(D), (C), (A), (B) (B), (C), (D), (A) (D), (C), (B), (A) (A), (B), (C), (D) |
(A), (B), (C), (D) |
The correct answer is option (4) : (A), (B), (C), (D) Degrees of elasticity on a linear demand curve in the descending order is : Elastic Demand (A) : Demand is elastic when the percentage change in quantity demanded is greater than the percentage change in price. Elasticity of demand is greater than 1. Unitary Elastic Demand (B) : Percentage change in quantity demanded is equal to the percentage change in price. Elasticity of demand is exactly 1. Inelastic Demand (C) : quantity demanded is relatively less responsive to price changes. Elasticity of demand is between 0 and 1. Perfectly Inelastic Demand (D) : Quantity demanded remains constant regardless of price changes. The elasticity of demand is zero. |