ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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price elastic.
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inferior.
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normal.
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price inelastic
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Detailed explanation-1: -The price elasticity of supply is given by a similar formula: If the percentage change in quantity demanded is greater than the percentage change in price, demand is said to be price elastic, or very responsive to price changes.
Detailed explanation-2: -An elastic demand is one in which the change in quantity demanded due to a change in price is large. An inelastic demand is one in which the change in quantity demanded due to a change in price is small. If the formula creates an absolute value greater than 1, the demand is elastic.
Detailed explanation-3: -Relatively Elastic Supply A price elasticity supply greater than one means supply is relatively elastic, where the quantity supplied changes by a larger percentage than the price change.
Detailed explanation-4: -The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price. The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.
Detailed explanation-5: -Supply is price elastic when the percentage change in quantity supplied is greater than the percentage change in price, and supply is price inelastic when the percentage change in quantity supplied is less than the percentage change in price.