The correct answer is C.
Price elasticity of demand is a measure of how responsive consumers are to changes in the price of a good or service. It is calculated by dividing the percentage change in the quantity demanded by the percentage change in the price.
If the percentage increase in the quantity of a commodity demanded is smaller than the percentage fall in its price, then the price elasticity of demand is less than one. This means that consumers are not very responsive to changes in the price of the good, and the demand for the good is relatively inelastic.
There are a number of factors that can affect the price elasticity of demand for a good or service. These include the availability of substitutes, the importance of the good in the consumer’s budget, and the time horizon over which the price change is considered.
In general, goods with few substitutes, that are important in the consumer’s budget, and that are considered over a short time horizon will have a more elastic demand. Goods with many substitutes, that are not important in the consumer’s budget, and that are considered over a long time horizon will have a more inelastic demand.
The price elasticity of demand is an important concept in economics. It can be used to predict how consumers will respond to changes in prices, and it can be used to help businesses set prices and make other marketing decisions.