If the price of any commodity decreases by $20$ % and the demand for that commodity increases by $40$ %, then the elasticity of demand would be __________.

perfectly elastic

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perfectly inelastic

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unit elastic

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highly elastic

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Solution

The correct option is D highly elastic
If the price of any commodity decreases by 20% and the demand for that commodity increases by 40% then the elasticity of demand would be highly elastic as the proportionate change of quantity demand is greater than the proportionate change of price.

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If the price of any commodity decreases by 20% and the demand for that commodity increases by 40%, then the elasticity of demand would be __________.

The correct option is D highly elasticIf the price of any commodity decreases by 20% and the demand for that commodity increases by 40% then the elasticity of demand would be highly elastic as the proportionate change of quantity demand is greater than the proportionate change of price.

If the price of any commodity decreases by $20$ % and the demand for that commodity increases by $40$ %, then the elasticity of demand would be __________.

The correct option is D highly elastic
If the price of any commodity decreases by 20% and the demand for that commodity increases by 40% then the elasticity of demand would be highly elastic as the proportionate change of quantity demand is greater than the proportionate change of price.