Assertion (A): The price elasticity of demand for a good stays the same whether its price is measured in rupees or in paise.
Reason (R): The price elasticity of demand is a ratio of two percentage changes, so it is a pure number.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Both (A) and (R) are true and (R) is the correct explanation of (A).
Assertion (A): The price elasticity of demand for a good stays the same whether its price is measured in rupees or in paise. — True. A rise from Rs 5 to Rs 7 is 40%, and so is a rise from 500 paise to 700 paise.
Reason (R): The price elasticity of demand is a ratio of two percentage changes, so it is a pure number. — True. Each percentage change has no unit, so their ratio has none.
Why R explains A?
A percentage change does not depend on the unit used to measure price. Elasticity is built only from percentage changes, so it is a pure number. Changing rupees to paise therefore leaves it unchanged.
NCERT (2026-27): “2.6 Elasticity of Demand Demands for some goods are very responsive to price changes while demands for certain others are not so responsive to price changes. Price elasticity of demand is a measure of the responsiveness of the demand for a good to changes in its price. Price elasticity of demand for a good is defined as the percentage change in demand for the good divided by the percentage change in its price. …” “Summary … The elasticity of demand is a pure number. …” |