Assertion (A): A demand curve with eₚ = 0.4 is elastic.
Reason (R): Demand is elastic when eₚ is greater than 1.

Both A and R are true, and R is the correct explanation of A.Correct answerYour answerBoth A and R are true, but R is not the correct explanation of A.Correct answerYour answerA is true, but R is false.Correct answerYour answerA is false, but R is true.Correct answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer D

Correct answer: D

A is false: 0.4 is less than 1, so demand is inelastic.
R correctly states the rule.

Concept: Reading the value of eₚ
Typical timeTypical: 100 s
Your timeYours: —

The rule this testsThe percentage method

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Assertion (A): A demand curve with eₚ = 0.4 is elastic.Reason (R): Demand is elastic when eₚ is greater than 1.

Explanation

Assertion (A): A demand curve with eₚ = 0.4 is elastic.
Reason (R): Demand is elastic when eₚ is greater than 1.