ICSE Class X Economics 2020 Solved Papers

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Question : 33
Total: 36
What do you understand by relatively inelastic demand?
Solution:  
Relatively Inelastic Demand : The demand is said to be relatively inelastic if the percentage change in quantity demanded is less than the percentage change in price i.e., if there is a small change in demand with a greater change in price. It is also called less elastic or simply inelastic demand.
For example : When the price falls by 10% and the demand rises by less than 10% (say 5% ), then it is the case of inelastic demand. The numerical value of price elastic here will be less than unity (Ep<1). The demand for goods of daily consumption such as rice, salt kerosene, etc. is said to be inelastic.
The demand curve DD is steeper, which shows that the demand is less elastic. The greater fall in price from OP to OP1, has led to small increase in demand from OM to OM1. Likewise, greater increase in price leads to small fall in demand.
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