Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:

Richa was buying a can of Pepsi and suddenly came across a thought that what elasticity does this commodity has?

Options:

Perfectly elastic demand

Perfectly inelastic demand

Neither elastic nor inelastic demand

Elastic demand

Correct Answer:

Elastic demand

Explanation:

Price elasticity measures the degree of responsiveness of a commodity to change in price. As, pepsi has close substitutes available it can be said that the demand would be elastic. Elastic demand of a commodity indicates that a change in price results in a large change in quantity demanded.