If the elasticity of demand for a commodity is perfectly inelastic then which of the following is incorrect?
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Answer:
The elasticity of demand shows the reaction of one variable with respect to the change in other variables on which it is dependent. Thus elasticity is an index of reaction. In economics, elasticity refers to a ratio of the relative changes in two quantities. It measures responsiveness or sensitiveness of one variable due to the change in another variable.
The elasticity of demand shows the reaction of one variable with respect to the change in other variables on which it is dependent. Thus elasticity is an index of reaction. In economics, elasticity refers to a ratio of the relative changes in two quantities. It measures responsiveness or sensitiveness of one variable due to the change in another variable.The elasticity of demand is defined as the responsiveness or sensitiveness of demand to given change in price or non-price determinant of a commodity.