Transportation plays a great role in any economy Which of the following modes of transportation has ...........

Indian Economy Infrastructure- Housing, Transport, Energy

Transportation plays a great role in any economy. Which of the following modes of transportation has the highest elasticity?

This questions was previously asked in

EPFO APFC (2015)

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Air

Rail

Road

Water

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Explanation:

- Elasticity in transportation indicates how demand responds to price changes.

- Option 2: Rail

- Rail transportation typically has moderate elasticity, as it's essential for passengers and freight services.

- Option 1 and 3: Air and Road

- Generally, road transport is considered to have higher price elasticity of demand than air travel. This means that road travel demand is more sensitive to changes in price (like fuel costs or tolls) than air travel demand, leading to larger changes in road travel volumes for the same price changes.

- Option 4: Water

- Water transport generally has low elasticity, focused on bulk goods with few alternatives.