Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

Arrange the following elasticity degrees along the demand curve in their ascending order.

(A) Elasticity $(e_D) = 1$
(B) Elasticity $(e_D) > 1$
(C) Elasticity $(e_D) < 1$
(D) Elasticity $(e_D) = 0$

Choose the correct answer from the options given below:

Options:

(A), (B), (C), (D)

(A), (C), (B), (D)

(B), (A), (D), (C)

(D), (C), (A), (B)

Correct Answer:

(D), (C), (A), (B)

Explanation:

The correct answer is Option (4) → (D), (C), (A), (B)

Along a linear demand curve, the elasticity of demand (eᴅ) changes from top to bottom:

  • At the lower end, demand is perfectly inelastic, so eᴅ = 0 → (D)

  • Then it becomes inelastic, where eᴅ < 1 → (C)

  • At the midpoint, elasticity is unitary, where eᴅ = 1 → (A)

  • Toward the upper end, demand is elastic, where eᴅ > 1 → (B)