Assertion :If the slope of the price consumption curve is zero, the elasticity of demand for the commodity is unity Reason: It shows that the total outlay on the commodity remains constant

Both Assertion and Reason are correct and Reason is the correct explanation for Assertion

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Both Assertion and Reason are correct but Reason is not the correct explanation for Assertion

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Assertion is correct but Reason is incorrect

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Assertion is incorrect and Reason is correct

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Solution

The correct option is A Both Assertion and Reason are correct and Reason is the correct explanation for Assertion
If the slope of the price consumption curve is zero, the elasticity of demand for the commodity is unity- the assertion is correct.

At this point when elasticity of demand is unity, then the proportionate change in quantity demand is equal to the proportionate change in price.

It shows that the total outlay on the commodity remains constant- The reason is the correct explanation for assertion as the total expenditure remain constant when the elasticity of demand is equal to one.

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