Forums Economics Assignment Help Price Elasticity of demand

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    admin
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    Demand is said to be inelastic when:
    A. the percentage change in quantity demanded is greater than the percentage change in price of a good
    B. in a linear demand curve, quantity demanded is close to zero (given the price) so that the percentage change in quantity demanded will be very high
    C. the percentage change in price exceeds the percentage change in quantity demanded of a good
    D. a relatively small change in price results in a relatively big change in quantity demanded

    #15671

    admin
    Keymaster

    Answer: (C) the percentage change in price exceeds the percentage change in quantity demanded of a good
    Reason: the quantity demanded responds only slightly to changes in the price… or …% change in Quantity is less than % change in price and price Elasticity <1
    For inelastic demand.
    price elasticity of demand image 3
    In this fig percentage change in price from P1 to P2 exceeds the percentage change in quantity demanded of a good from Q1 to Q2.

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