Demand for which of the following commodities will be almost perfectly inelastic?
(A) Gold
(B) Cars
(C) Dining out
(D) Basic foodgrains
Correct Answer : Basic foodgrains
Question Asked : SSC Junior Engineer (Civil) 2018
Explanation : Elasticity is the relationship between changes in demand and changes in price. Perfectly inelastic demand describes a good that experiences no change in quantity demanded despite any percentage change in the price. Perfectly inelastic demand is a theoretical concept and cannot be applied in a practical situation. However, in case of essential goods, such as salt, the demand does not change with change in price. Therefore, the demand for basic foodgrains is perfectly inelastic.
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Tags : Microeconomics