Q. Consider the following statements:

1. If a commodity has a low price, it will generally have a low price elasticity of demand.
2. The price elasticity of demand for rice is less than that for wheat.

Which of the above statements is / are correct?
Answer: Only 1
Notes: Statement 1 is generally correct, as low-priced commodities tend to have low price elasticity; consumers are less responsive to their price changes. Statement 2, however, is not necessarily correct, since the elasticity of rice compared to wheat varies depending on factors like substitutes, preferences, and market conditions, and cannot be assumed universally.