Price Elasticity of Demand MCQ — Class 11

Test your understanding of Price Elasticity of Demand with 20 free questions across Easy and Moderate. Hard and Extreme require Premium. Choose a level in the interactive quiz to answer questions and review explanations.

Open interactive chapter quizzes

Key concepts to revise

Price elasticity of demand

Price elasticity of demand: the responsiveness of quantity demanded to a change in the commodity’s own price

Percentage method

Percentage method: elasticity measured as percentage change in quantity demanded divided by percentage change in price, usually taken in absolute magnitude

Perfectly inelastic demand

Perfectly inelastic demand: quantity demanded does not change when price changes, so elasticity is zero

Perfectly elastic demand

Perfectly elastic demand: an extremely small price change causes an unlimited response in quantity demanded, represented by a horizontal demand curve

Unitary elastic demand

Unitary elastic demand: percentage change in quantity demanded equals percentage change in price in magnitude

Relatively elastic demand

Relatively elastic demand: percentage change in quantity demanded is greater than the percentage change in price, so elasticity exceeds one

Relatively inelastic demand

Relatively inelastic demand: percentage change in quantity demanded is smaller than the percentage change in price, so elasticity is less than one

Availability of substitutes

Availability of substitutes: more and closer substitutes generally make demand more price elastic

Nature of commodity

Nature of commodity: necessities generally have less elastic demand than luxuries, other things equal

Total expenditure relation

Total expenditure relation: when price and total expenditure move in opposite directions demand is elastic, while the same direction indicates inelastic demand

Try these sample MCQs

1. Which concept best matches this situation? A 10% price fall causes quantity demanded to rise by 20%.

  1. Percentage method
  2. Price elasticity of demand
  3. Perfectly elastic demand
  4. Relatively inelastic demand
Check answer and explanation

Price elasticity of demand. Price elasticity of demand: the responsiveness of quantity demanded to a change in the commodity’s own price

2. Which concept best matches this situation? Quantity changes 20% when price changes 10%, giving elasticity magnitude 2.

  1. Perfectly inelastic demand
  2. Unitary elastic demand
  3. Percentage method
  4. Availability of substitutes
Check answer and explanation

Percentage method. Percentage method: elasticity measured as percentage change in quantity demanded divided by percentage change in price, usually taken in absolute magnitude

3. Which concept best matches this situation? The demand curve is vertical.

  1. Perfectly elastic demand
  2. Relatively elastic demand
  3. Nature of commodity
  4. Perfectly inelastic demand
Check answer and explanation

Perfectly inelastic demand. Perfectly inelastic demand: quantity demanded does not change when price changes, so elasticity is zero

After the quiz

Write down the concepts you missed. Explain each one in your own words, give an example, and attempt the level again without notes. A high score on a short quiz does not replace revision of the whole chapter.

Continue Economics revision

Related chapter quizzes