The market demand function for a commodity is given as ; where is the price of the commodity. Which of the following statements about the market demand curve is correct?
Tap an option to check your answer.
1 mark, −0.25MicroeconomicsDemand theory and elasticityPrice elasticity of demandModerateabout 1 min
JNU SSS 2013 Question 75: Demand theory and elasticity
Answer and worked solution
Checking your account…
Plain-text version
The market demand function for a commodity is given as D(p) = 1/p; where p is the price of the commodity. Which of the following statements about the market demand curve is correct? (A) The price elasticity of demand for this commodity is different at different points on the demand curve and it varies from 0 to 1 (B) The price elasticity of demand for this commodity is different at different points on the demand curve and it varies from 0 to ∞ (C) The price elasticity of demand for this commodity is equal to 1 at any point on the demand curve (D) None of the above
Demand theory and elasticity has come up 161 times in 7 exams since 2004.
What this question tests
This question is on Price elasticity of demand, part of Demand theory and elasticity in Microeconomics.
How responsive quantity is to price, at a point, along a linear curve, and for constant-elasticity demand.
TestStop has 41 past-paper questions on this subtopic; the nearest in year are below.
- GATE 2021 · Q1A firm finds that for the product that it produces, its (own) price elasticity of demand is 4. Currently…
- IIT JAM 2021 · Q48A consumer always spends 50% of monthly income on food. A value added tax raises food prices by 20% while…
- GATE 2023 · Q52Suppose the own price elasticity of demand and income elasticity of demand are given by eₚ and e_I…
Similar questions from other papers
- Goods are substitutes when an increase in price of one leads to _ of other commodity.
- Let e, R, and p represent own price elasticity of demand, total revenue, and price, respectively for a good. If (∂ R)/(∂ p)<0, then
- If the demand function is Q = 100 - 2P, when P = 25; then elasticity of demand will be:
- The decision by consumers to buy larger quantities of a good at each possible price can not be caused by
- The demand function is given as log Q = log A + 0.5log P, where Q is quantity, P is the unit price of the good and A is a positive real number. The own price elasticity…
Question from the JNU SSS 2013 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.