For a particular good,a 10 percent increase in price causes a 3 percent decrease in quantity demanded.Which of the following statements is most likely applicable to this good?
A)The relevant time horizon is short.
B)The good is a luxury.
C)The market for the good is narrowly defined.
D)There are many close substitutes for this good.

Question

Quizplus · Accepted Answer

The good is inelastic since the percentage change in quantity demanded is less than the percentage change in price. This is more likely in the short term when consumers have less time to adjust their behavior.

For a Particular Good,a 10 Percent Increase in Price Causes