Question

Choose the correct option :
The commodities having relatively less elastic demand
A. Icecream
B. Salt
C. Medicine
D. Bucket
Option:
1. A & C
2. B & C
3. C & D
4. B & D
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Answer 1

Answer:

B and D

Explanation:

Thus, availability of close substitutes makes the demand sensitive to change in the prices. On the other hand, commodities with few or no substitutes like bucket and salt have less price elasticity of demand.

Answer 2

Option 2, B&C is the correct answer. Salt and Medicine are the commodities having relatively less elastic demand.

• The concept of elasticity of demand tells us about the responsiveness (increase or decrease in demand) of a commodity's demand to a change in its price.
• If the commodity is highly responsive it has more elastic demand.
• if the commodity is not very responsive it has less elastic demand.
• Usually, necessary goods have less elastic demand. It is so because such goods are basic goods that are mandatorily consumed by everyone irrespective of their price. Also, such goods do not have close substitutes.
• Ice cream has elastic demand because a person may substitute a more costly ice-cream with less costly ice-cream.
• Bucket also has elastic demand because the quality of bucket depends on a person's budget. It has substitutes based on quality.
• Therefore, salt and medicine are correct answer. They have less elastic demand. It is so because salt is basic commodity with no substitute. medicines are usually prescriptive and despite having substitutes they are bought on the basis of prescription irrespective of their price.