If a 20 per cent increase in the price of a used car results in a 10 per cent decrease in the quantity of used cars demanded, then the demand for used cars is
A) inelastic.
B) unit elastic.
C) perfectly elastic.
D) elastic.

Question

Quizplus · Accepted Answer

The demand for used cars is inelastic because the percentage change in quantity demanded (10%) is less than the percentage change in price (20%). This indicates that consumers' demand for used cars does not decrease proportionally with an increase in price, which is characteristic of inelastic demand.

If a 20 Per Cent Increase in the Price of a Used