Use the following figure to answer the question :
-A 4% decline in the price of laser printers causes the quantity demanded to rise by 8%. The demand for laser printers is
A)perfectly elastic.
B)elastic.
C)unit elastic.
D)inelastic.
E)perfectly inelastic.

Question

Use the following figure to answer the question : 
-A 4% decline in the price of laser printers causes the quantity demanded to rise by 8%. The demand for laser printers is
A)perfectly elastic. 
B)elastic. 
C)unit elastic. 
D)inelastic. 
E)perfectly inelastic.

Quizplus · Accepted Answer

The fact that a 4% decline in price causes an 8% increase in quantity demanded indicates that the demand for laser printers is elastic. This means that consumers are responsive to changes in price and will buy more when the price goes down. If the demand were unit elastic, a 4% decline in price would result in a 4% increase in quantity demanded, and if the demand were inelastic, a 4% decline in price would result in a smaller increase in quantity demanded (less than 4%). Therefore, choice B is the best answer.

Use the Following Figure to Answer the Question