Question

Assertion (A): Degree of price elasticity is less than 1 in

case of relatively inelastic demand.

Reasoning(R): Change in demand is less than change in price.​

Answer 1

For inelastic demand:

E = 0, or say, E < 1

→ ∆Q/∆P < 1

→ ∆Q < ∆P

That means that the change in demand is less than change in price. Thus, the answer is:

Both Assertion and Reason are correct, and Reason is the correct explanation of Assertion