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Elastic and Inelastic Demand

Utility is th...

Question

Utility is the basis of demand.

A

True

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B

False

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Solution

The correct option is A True
Demand for a commodity is based on the utility derived from it. A person will demand a commodity only if it gives him/her some satisfaction or utility, otherwise, it will not be demanded. Therefore, we can say that utility forms the basis of demand for a commodity.

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