Which of the following factors does NOT affect the price elasticity of demand?
A. Nature of the commodity (necessity or luxury)
B. Time period allowed for adjustment
C. Cost of production of the commodity
D. Availability of close substitutes
Answer: Option C
Solution (By JKSSB Mock Tests)
The cost of production influences the supply side. Price elasticity of demand depends on substitutes, nature of the good, proportion of income spent, time and habits.
Explanation:
Demonetisation is the act of stripping a currency unit of its status as legal tender. In India, high denomination notes were demonetised in 2016.
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