Question

To say that the demand for a commodity is elastic means ________________.

• A. that the demand curve slopes downwards to the right
• B. that more is sold at a lower price.
• C. that a rise in will increase total revenue
• D. that the change in quantity sold is proportionately greater than the change in price.

Answer 1

The correct option is D that the change in quantity sold is proportionately greater than the change in price.

solution:

$elasticity=\frac{\%changeinquantitydemanded}{\%changeinprice}$

for elastic it is > 1 so

change in quantity demanded > change in price

hence the correct option: D