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If the price is decreased form Rs. 10 to Rs. 8 of a commodity but the quantity demanded remains the same price elasticity is _________.
- a)1
- b)0
- c)?
- d)None
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
If the price is decreased form Rs. 10 to Rs. 8 of a commodity but the ...
When the price elasticity of demand for a good is perfectly inelastic (Ed =0), changes in the price do not affect the quantity demanded for the good; and hence option B is the correct answer.
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If the price is decreased form Rs. 10 to Rs. 8 of a commodity but the ...
When the price elasticity of demand for a good is perfectly inelastic (Ed =0), changes in the price do not affect the quantity demanded for the good; and hence option B is the correct answer
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If the price is decreased form Rs. 10 to Rs. 8 of a commodity but the ...
Price Elasticity of Demand:
The price elasticity of demand refers to the responsiveness of the quantity demanded of a commodity to a change in its price. It is usually expressed as the percentage change in quantity demanded divided by the percentage change in price. In other words, it measures the extent to which the quantity demanded of a commodity changes as its price changes.
Formula:
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
If the price of a commodity changes but the quantity demanded remains the same, it means that the price elasticity of demand is zero. This is because there is no change in the quantity demanded despite the change in price.
Answer:
In the given scenario, the price of the commodity has decreased from Rs. 10 to Rs. 8, but the quantity demanded remains the same. This implies that the price elasticity of demand is zero, and the correct answer is option 'B'.
The price elasticity of demand refers to the responsiveness of the quantity demanded of a commodity to a change in its price. It is usually expressed as the percentage change in quantity demanded divided by the percentage change in price. In other words, it measures the extent to which the quantity demanded of a commodity changes as its price changes.
Formula:
Price Elasticity of Demand = (% Change in Quantity Demanded) / (% Change in Price)
If the price of a commodity changes but the quantity demanded remains the same, it means that the price elasticity of demand is zero. This is because there is no change in the quantity demanded despite the change in price.
Answer:
In the given scenario, the price of the commodity has decreased from Rs. 10 to Rs. 8, but the quantity demanded remains the same. This implies that the price elasticity of demand is zero, and the correct answer is option 'B'.
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