Question

What will be the elasticity of demand for the given commodity as shown in the picture?

• A. Elastic
• B. Unit elastic
• C. Inelastic
• D. Perfectly elastic

Hint:

Inelastic goods, like salt, have a low price elasticity of demand because they are necessities and have few substitutes.

Answer 1

The Correct Option is C

Step 1: Understanding the elasticity of demand.
The image refers to the elasticity of demand for salt, which is typically inelastic. This means that even with a change in price, the quantity demanded doesn't significantly change because salt is a necessity with few substitutes.

Step 2: Analyzing the options.

• (A) Elastic: Incorrect. Salt is not elastic; its demand does not change much with price fluctuations. • (B) Unit elastic: Incorrect. Unit elasticity would mean that the percentage change in quantity demanded is exactly equal to the percentage change in price, which doesn't apply here. • (C) Inelastic: Correct. The demand for salt is inelastic, as it is a necessity with no close substitutes. • (D) Perfectly elastic: Incorrect. Perfectly elastic demand would imply that even the smallest price change would result in an infinite change in quantity demanded, which doesn't apply to salt.

Step 3: Conclusion.
The correct answer is (C) Inelastic.
Final Answer: (C) Inelastic.