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Question

Which of the following would be correct of the demand for a commodity is elastic?

A
the greater the number of good substitutes available
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B
the longer the period gf time considered
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C
the greater the proportion of income spent on the commodity
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D
all the above
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Solution

The correct option is D all the above
A commodity has a relatively elastic demand when the proportionate change in quantity demand is greater than the proportionate change in price, then the following would be correct of the demand for a commodity is elastic:a) the greater the number of good substitutes available
b) the longer the period of time considered
c) the greater the proportion of income spent on the commodity

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