Multiple choice

Elasticity of demand is always equal to zero in case of ________________.

  1. luxury goods

  2. normal goods

  3. necessities

  4. inferior goods

  5. substitute goods

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

'Elasticity of demand' refers to the change in demand due to change in price. In case of necessities, there will be no effect of the change in price on the demand for these goods, which are considered as the basic necessities of life. Consumers will buy these necessities even when their prices will increase.