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Class 12 (HSC Board)Economics2026-27 Syllabus

Chapter 3B Elasticity of Demand Solutions

Complete Maharashtra State Board Balbharati & Yuvakbharati textbook solutions for Chapter 3B Elasticity of Demand. Step-by-step solved exercises, numerical problems, and digest answers.

20 Solved Questions• 9 Diagrams• 1328 words

Maharashtra State Board Class 12 Economics Solutions Chapter 3B Elasticity of Demand

1. Complete the following statements:

Question 1 Maharashtra Board Solution
Price elasticity of demand on a linear demand curve at the X axis is …………… a) zero b) one c) infinity d) less than one
Solution & Step-by-Step Answer:
a) zero
Question 2 Maharashtra Board Solution
Price elasticity of demand on a linear demand curve at the Y-axis is equal to a) zero b) one c) infinity d) greater than one
Solution & Step-by-Step Answer:
c) infinity
Question 3 Maharashtra Board Solution
Demand curve is parallel to X axis, in case of ………….. a) perfectly elastic demand b) perfectly inelastic demand c) relatively elastic demand d) relatively inelastic demand
Solution & Step-by-Step Answer:
a) perfectly elastic demand
Question 4 Maharashtra Board Solution
When percentage change in quantity demanded is more than the percentage change in price, the demand curve is ……………….. a) flatter b) steeper c) rectangular d) horizontal
Solution & Step-by-Step Answer:
a) flatter
Question 5 Maharashtra Board Solution
Ed = 0 in case of ……………… a) luxuries b) normal goods c) necessities d) comforts
Solution & Step-by-Step Answer:
c) necessities

2. Give et onomic terms:

Question 1 Maharashtra Board Solution
Degree of responsiveness of quantity demanded o change in income only.
Solution & Step-by-Step Answer:
Income elasticity
Question 2 Maharashtra Board Solution
Degree of responsiveness of a change in quantity demanded of one commodity due to change in the price of another commodity.
Solution & Step-by-Step Answer:
Cross elasticity
Question 3 Maharashtra Board Solution
Degree of responsiveness of a change of quantity demanded of a good to a change in its price.
Solution & Step-by-Step Answer:
Elasticity of demand
Question 4 Maharashtra Board Solution
Elasticity resulting from infinite change in quantity demanded.
Solution & Step-by-Step Answer:
Perfectly elastic demand
Question 5 Maharashtra Board Solution
Elasticity resulting from a proportionate change in quantity demanded due to a proportionate change in price.
Solution & Step-by-Step Answer:
Price elasticity

3. Complete the correlation:

1) Perfectly elastic demand: Ed = ∞ :: ……………. : Ed = 0
2) Rectangular hyperbola : ………………. : Steeper demand curve : Relatively inelastic demand.
3) Straight line demand curve : Linear demand curve:: …………….. non linear demand curve.
4) Pen and ink : …………….. :: Tea or Coffee: Substitutes.
5) Ratio method : Ed = :: …………… : Ed =
Answer:

4. Assertion and Reasoning type questions:

Question 1 Maharashtra Board Solution
Assertion (A) : Elasticity of demand explains that one variable is influenced by another variable. Reasoning (R) : The concept of elasticity of demand indicates the effect of price and changes in other factors on demand. Options: 1) (A) is True, but (R) is False 2) (A) is False, but (R) is True 3) Both (A) and (R) are True and (R) is the correct explanation of (A) 4) Both (A) and (R) are True and (R) is not the correct explanation of (A)
Solution & Step-by-Step Answer:
3) Both (A) and (R) are True and (R) is the correct explanation of (A)
Question 2 Maharashtra Board Solution
Assertion (A) : A change in quantity demanded of one commodity due to a change in the price of other commodity is cross elasticity. Reasoning (R) : Changes in consumers income leads to a change in the quantity demanded. Options: 1) (A) is True, but (R) is False 2) (A) is False, but (R) is True 3) Both (A) and (R) are True and (R) is the correct explanation of (A) 4) Both (A) and (R) are True and (R) is not the correct explanation of (A)
Solution & Step-by-Step Answer:
4) Both (A) and (R) are True and (R) is not the correct explanation of (A)
Question 3 Maharashtra Board Solution
Assertion (A) : Degree of price elasticity is less than one in case of relatively inelastic demand. Reasoning (R): Change in demand is less then the change in price. Options: 1) (A) is True, but (R) is False 2) (A) is False, but (R) is True 3) Both (A) and (R) are True and (R) is the correct explanation of (A) 4) Both (A) and (R) are True and (R) is not the correct explanation of (A)
Solution & Step-by-Step Answer:
3) Both (A) and (R) are True and (R) is the correct explanation of (A)

5. Distinguish between:

Question 1 Maharashtra Board Solution
Relatively elastic demand and Relatively inelastic demand.
Solution & Step-by-Step Answer:
Relatively Elastic Demand

Relatively inelastic demand.

Question 2 Maharashtra Board Solution
Perfectly elastic demand and Perfectly inelastic demand.
Solution & Step-by-Step Answer:
Perfectly elastic demand :

Perfectly inelastic demand.

6. Answer the following questions:

Question 1 Maharashtra Board Solution
Explain the factors influencing elasticity of demand.
Solution & Step-by-Step Answer:
The concept of Price Elasticity was developed i by great neo-classical economist Dr. Alfred \ Marshall in the year 1890. According to Dr. Alfred Marshall, “The elasticity or responsiveness of demand in a market is great or small, according to the amount demanded which increases much or little for a given fall in price, and diminishes much or little for a given rise in price. ” Elasticity of demand in fact refers to the £ degree of responsiveness of the quantity demanded of a commodity to change in the variable on which demand depends.
Question 2 Maharashtra Board Solution
Explain the total outlay method of measuring elasticity of demand?
Solution & Step-by-Step Answer:
Total Outlay Method : This method was introduced by Dr. Alfred Marshall. The limitation of this method is that in this method unlike ratio method, the exact numerical value of the elasticity of demand cannot be determined. According, to this method, the elasticity of demand is measured on the basis of expenditure incurred by consumer when the price of a commodity changes.

Total outlay or total expenditure can be calculated by multiplying the price with the quantity demanded (Price x Quantity demand = Total Expenditure). Depending upon the kind of change in total outlay, whether it increases, or decreases, or remain constant with the change in price we will be able to decide the type of elasticity. This can be explained with the following example:-

Question 3 Maharashtra Board Solution
Explain importance of elasticity of demand.
Solution & Step-by-Step Answer:

7. Observe the following figure and answer the questions:

Question 1 Maharashtra Board Solution
Identify and define the degrees of elasticity of demand from the following demand curves.
Solution & Step-by-Step Answer:
Concept: Perfectly Inelastic demand (Ed = 0) Explanation : When change in price has no effect on the quantity demanded of that commodity, then it is called as perfectly inelastic demand. Demand curve ‘DD’ is a vertical straight line parallel to ‘Y’ – axis.



Concept: Perfectly Elastic demand (Ed = ∞) (infinity)
Explanation: When a change in price leads to infinite change in quantity demanded of a commodity then it is called as perfectly) (d) elastic demand.
Demand curve is horizontal straight line ( parallel to ‘X’ – axis.

Concept: Ed = 1 Unitary elastic demand Explanation : When proportionate or percentage change in quantity demanded is exactly equal to proportionate or percentage change in price, then it is called as Unitary Elastic demand. Demand curve is called as rectangular hyperbola.


Concept: Relatively Elastic Demand (Ed > 1)
Explanation : When proportionate or percentage change in quantity demanded is more than proportionate change it its price, then it is called as Relatively Elastic Demand. Demand curve is called as flatter curve.

Question 2 Maharashtra Board Solution
In the following diagram AE is the linear demand curve of a commodity. On the basis of the given diagram state whether the following statements are True or False. Give reasons to your
Solution & Step-by-Step Answer:
1) Demand at point ‘C’ is relatively elastic demand. 2) Demand at point ‘B’ is unitaiy elastic demand. 3) Demand at point ‘D’ is perfectly inelastic demand. 4) Demand at point ‘A’ is perfectly elastic demand. Answer:

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Chapter 3A Demand Analysis
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Chapter 4 Supply Analysis