Demand and Supply MCQs | Elasticities

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Price elasticity of demand is defined as a measure of the extent of changes in the market demand for a good in response to a change in price.
Demand and Supply (Elasticities) MCQs

Demand and Supply Elasticities MCQs

Price elasticity of demand is defined as a measure of the extent of changes in the market demand for a good in response to a change in price. Here on MCQs.club we have made easy understandable Multiple-Choice Questions (MCQs) on elasticities. These MCQs fully cover price elasticity of demand and its types, income elasticity of demand, equilibrium price, cross price elasticity. These MCQs on types of elasticity and cost elasticity are useful for Professional accountancy exams, Business management exams and Competitive exams.

  1. Price elasticity of demand is defined as a measure of the extent of changes in the market demand for a good in response to a change in price.
    1. True
    2. False
  1. Price elasticity of demand –
    1. Measuring the price elasticity of demand is dependent on discovering what decisions a firm will make with regard to their pricing.
    2. It is done by measuring how demand changes in relation to a price change.
    3. Both A&B
    4. None
  1. Factors determining price elasticity of demand include:
      1. Nature of the commodity
      2. Number of substitutes
      3. Goods having several uses
      4. Durable Goods and perishable goods
      5. Price Level, Income Level
      6. Consumer’s Loyalty
    1. (I) (III) and (V) only
    2. (III) (IV) and (V) only
    3. All of the above
    4. None
  1. For comforts and luxuries, the elasticity of demand is __________ because even a smaller change in price brings bigger changes in quantity demanded.
    1. Elastic
    2. Inelastic
    3. Perfectly elastic
    4. None
  1. Elasticity of demand for those goods which are either high priced or low priced is:
    1. Elastic
    2. Inelastic
    3. Perfectly inelastic
    4. None
  1. Which characteristics Perfectly elastic demand shows:
    1. Value of infinity
    2. Smallest price rise will extinguish demand
    3. Both A&B
    4. None
  1. Which characteristics elastic demand shows:
    1. Value between 1 and infinity
    2. Demand responds strongly to price
    3. Cut price to raise revenue
    4. All of the above
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