Question : Other things equal if the price elasticity of demand for a good with more substitutes is:
Option 1: Larger
Option 2: Smaller
Option 3: Zero
Option 4: Unity
Correct Answer: Larger
Solution : Other things being equal, a good with more substitutes has a higher price elasticity of demand. As the consumer can shift its substitutes so that it makes the elasticity larger or higher. Hence a is the correct answer.
Question : Which one is not the type of elasticity of demand?
Question : If the price elasticity of demand for a good is zero, it means the demand is:
Question : If a demand curve is VERTICAL, the following equation represents the own-price elasticity of demand for this good:
Question : The demand for a good is said to be inelastic when the price elasticity of demand is:
Question : The country can improve its balance of payments by devaluation when the sum of elasticity of demand for exports and imports is _____________.
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile