ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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0.333
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30
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0.033
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3
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Detailed explanation-1: -Inelastic demand occurs when changes in price cause a disproportionately small change in quantity demanded. For example, a good with inelastic demand might see its price increase by 30%, but demand falls by only 10% as a result.
Detailed explanation-2: -perfectly elastic demand Was this answer helpful?
Detailed explanation-3: -When demand is unit elastic, a 10 percent change in the price of the good will cause a change in quantity demanded equal to 10 percent. Unit elastic is condition when price elasticity of demand is 1. The % change in price will cause similar % change in quantity demanded.
Detailed explanation-4: -When the price increases by 30% and the quantity demanded drops by 30%, the price elasticity of demand is: Unitary elastic.