Demand is inelastic if the price elasticity of demand is
A)less than 1.
B)equal to 1.
C)greater than 1.
D)equal to 0.

Question

Quizplus · Accepted Answer

Demand is considered inelastic when the price elasticity of demand is less than 1. This means that a change in price will result in a proportionally smaller change in quantity demanded. In other words, when the price changes, people will still need or want the same amount of the good or service and are willing to pay the higher price. Examples of inelastic goods include prescription drugs, gasoline, and basic necessities like food and clothing.

Demand Is Inelastic If the Price Elasticity of Demand Is