SSC CGL 2025 Tier-I · 17 September 2025, Shift 3 · General Awareness · Question 18 of 100

We transcribed this text from the pictures on a candidate's response sheet for this shift; the answer is the key SSC colour-marked on that sheet. Solution last reviewed 11 September 2026.

Where this paper and its answers come from

SSC does not publish CGL question papers or a public answer key. From 2025 the candidate response sheet prints every question and option as a picture, so the text here is transcribed from those pictures for this shift and checked against them independently; where the layout carries meaning, the picture is shown as well. Each answer is the key SSC colour-marked on that sheet. SSC released a tentative key for challenge and later its final one, both only to candidates behind a login, and the sheet does not say which of the two it carries. The solutions are written by UnlockIAS.

If the price of a product goes up by 10% and, as a result, the quantity demanded falls by 20%, how would you classify the demand?

(a)Demand is elastic (elasticity greater than 1)
(b)Demand is inelastic (elasticity less than 1)
(c)Demand is unitary elastic (elasticity equals 1)
(d)Demand is perfectly elastic (elasticity is infinite)

Answer

Why

Correct — A. Price elasticity of demand = percentage change in quantity ÷ percentage change in price.

Change in price = +10%
Change in quantity = −20%
Elasticity = 20 ÷ 10 = 2 (size only, the minus sign dropped)

2 is greater than 1, so demand is elastic: option (a).

Why the others are wrong

(b)
Demand is inelastic (elasticity less than 1) — Inelastic needs a smaller response. Quantity would have to fall by less than 10% for a 10% price rise. Here it falls 20%, giving elasticity 2.
(c)
Demand is unitary elastic (elasticity equals 1) — Unitary needs equal percentages. A 10% price rise would have to cut quantity by exactly 10%. A 20% fall gives elasticity 2, not 1.
(d)
Demand is perfectly elastic (elasticity is infinite) — Perfectly elastic means a horizontal demand curve, where demand drops to zero at any other price and elasticity is infinite. A finite 20% fall gives a finite 2.

Concept

Price elasticity of demand measures how strongly quantity demanded responds to a change in price. NCERT defines it as the percentage change in demand divided by the percentage change in price.

Below 1 the demand is inelastic, exactly 1 is unitary elastic, and above 1 is elastic. A horizontal demand curve is perfectly elastic, and a vertical one has elasticity 0.

Spending gives a quick cross-check. Price × quantity becomes 1.10 × 0.80 = 0.88 of the old total, a 12% fall. When quantity falls by a larger percentage than price rises, total expenditure on the good goes down, which is the elastic case.

Key facts

Price elasticity of demand = percentage change in quantity demanded ÷ percentage change in price.
Elasticity above 1 is elastic, below 1 is inelastic, and exactly 1 is unitary elastic.
A horizontal demand curve is perfectly elastic, with elasticity infinite.
If quantity falls by a larger percentage than price rises, total expenditure on the good falls.

Study next

Elasticity along a linear demand curveNecessities, luxuries and close substitutes as factors deciding elasticityPrice elasticity and total expenditure

Common traps

Dividing the price change by the quantity change: 10 ÷ 20 = 0.5 would wrongly read as inelastic.
Letting the minus sign decide: elasticity is compared with 1 by its size, so −2 counts as elastic.

Here both percentage changes are given and only the category is asked, so the whole task is one division and a comparison with 1.

Related PYQs

No directly related past PYQ was found.

Topic: Economic Scene — all 92 SSC CGL questions on it, every solved shift.