Question

the following commodities which has the lowest elasticity of demand : (a) tea (b) salt (c) car (d) house
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Answer 1

Salt has the lowest elasticity of demand

Explanation for correct option:

• Commodities that can not be cut from the budget with the increase in price are considered to have a low elasticity of demand.

• Such as salt, consumers can't stop using salt due to the increase in rice because it is an essential item.

• A change in price will not affect the demand.

Explanation for incorrect option:

People can

• Stop using cars and use public transport instead.

• Consume less tea.
• Stay in a less expensive or a rental house.

The increase in price affects the demand for all of these options. Therefore, the correct option is b) salt.