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Elasticity of Demand — Economics STD 10 — Question

ICSE BoardEnglish MediumSTD 10EconomicsElasticity of Demand2 Marks
Question
Study the statement given below and state whether demand will be elastic or inelastic, citing reasons for your answer.
(i) Demand for cigarettes by a habitual smoker.
(ii) A consumer postpones the purchase of a refrigerator till the off-season sale.
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Answer

(i) Inelastic, because he cannot reduce the consumption of cigarettes much when price rises.
(ii) Elastic, because consumer does not need refrigerator immediately.

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