ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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sales will grow by more than 10%
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Sales will grow by 10%
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Sales will grow by less than 10%
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Sales will decrease by 10%
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Detailed explanation-1: -Answer and Explanation: If the price elasticity of demand for a good is 0.75, the demand for the good can be described as A. elastic. A good is inelastic if the quantity demanded tends to remain relatively constant despite changes in price.
Detailed explanation-2: -If the price elasticity of demand is . 75 (i.e. 3/4), it means the % change in quantity demanded is lower or less than the % change in price (demand is inelastic or less than 1). In other words, quantity demanded is less responsive to changes in price for this good.
Detailed explanation-3: -The price elasticity of demand varies between different pairs of points along a linear demand curve. The lower the price and the greater the quantity demanded, the lower the absolute value of the price elasticity of demand.
Detailed explanation-4: -If the value is less than 1, demand is inelastic. In other words, quantity changes slower than price. If the number is equal to 1, elasticity of demand is unitary. In other words, quantity changes at the same rate as price.