ECONOMICS
ELASTICITY OF DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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elastic
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unit elastic
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inelastic
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really expensive
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Detailed explanation-1: -It is given that the price elasticity of demand is-0.66 which is less than one; therefore, the product, in this case, is considered as inelastic. Hence, as the price of the product declines, the total revenue declines, and vice versa.
Detailed explanation-2: -The price elasticity of demand for a good is given as-0.67, which shows the inelasticity of the demand curve to the price change.
Detailed explanation-3: -Thus, a product’s price elasticity of demand equal to 0.6 means that the demand is inelastic (since the elasticity is less than 1). An increase in the price by 1% would reduce the quantity demanded by 0.6%.
Detailed explanation-4: -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.