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Concept of 'elasticity of demand' is useful for the finance minister.

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True

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False

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Solution

The correct option is A True
Concept of 'elasticity of demand' is useful for the finance minister because it helps in formulating the fiscal policy which is concerned with imposition of taxes on various commodities.

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Q. Concept of elasticity of demand is useful for finance minister.

Q. State whether the following statement are TRUE and FALSE.

1. Demand for luxuries is elastic.

2. Perfectly inelastic demand curve is parallel to the X axis.

3. Total outlay is price multiplied by quantity.

4. Unitary Elastic Demand rarely occurs in practice.

5. Concept of Elasticity of Demand is useful for finance minister.

Q. Elasticity of demand is a very useful concept for producers, __________.

Q. Give reasons or explain the following statements:

1. Demand for necessaries is inelastic.

2. Demand for habitual goods is inelastic.

3. Concept of Elasticity of Demand helps trade union leaders.

4. Demand for commodity having multiple uses has elastic demand.

5. Demand for goods having snob appeal has elastic demand.

Q. What is the importance of concept of elasticity of demand.

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