Read the following and answer the questions from 7-10.
Salt has no close substitute and moreover a household has to share a
negligible part of his entire budget. Therefore, even in spite of increase inprice of salt its demand will not be affected.
However, demand for a particular brand of toothpaste is comparatively
more elastic as there are many brands of tooth paste available in the
market, so the consumers can switch over to any other brand in case of
hike in the price of a particular brand of tooth paste.
7. Which factors according to above passage are responsible for price
elasticity of demand?
8. Is the demand for a luxury item elastic? Why?
9. Name some commodities, which have small number of substitutes.
10. What o you think about the price elasticity of demand for a particular
brand of match box? Is it elastic or inelastic? Explain.
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Explanation:
Question No. 5
If demand is price elastic
O A1 percent decrease in the price leads to an increase in the a
O A 1 percent increase in the price leads to an increase in the a
The price is very sensitive to any shift of the supply curve
vino leads to a decrease in the
If the demand is price elastic
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