Point elasticity is useful for which of the following situations?

CA Foundation · Business Economics · MTP · May 2026
Point elasticity is useful for which of the following situations?
(A) A. The bookstore is considering doubling the price of notebooks.
(B) B. A restaurant is considering lowering the price of its most expensive dishes by 50%.
(C) C. An auto producer is interested in determining the response of consumers to the price of cars being lowered by ₹ 100.
(D) D. None of the above.

Suggested Answer and Working Notes:

Correct Answer: Option (C)

C. An auto producer is interested in determining the response of consumers to the price of cars being lowered by ₹ 100.

Topics: Theory of Demand and Supply

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