Identify and explain the concept : 40% fall in price of a commodity leads to 40% rise in quantity demanded.
Q.2 (A) (iv) Identify and explain the concept : 40% fall in price of a commodity leads to 40% rise in quantity demanded.
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Answer: Unitary elastic demand
Concept: Unitary elastic demand \((E_d = 1)\).
Explanation: When the percentage change in quantity demanded is exactly equal to the percentage change in price, demand is unitary elastic. Here \(E_d = \dfrac{40\%}{40\%} = 1\). The demand curve in this case is a rectangular hyperbola.
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· 28 Oct 2026
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