When the calculated price elasticity of demand is -0.85, demand is
A) perfectly inelastic.
B) elastic.
C) unit-elastic.
D) inelastic.

Question

Quizplus · Accepted Answer

A calculated price elasticity of demand of -0.85 indicates that demand is inelastic. Inelastic demand means that changes in price have a relatively small impact on the quantity demanded. Furthermore, demand is considered to be inelastic when the absolute value of the price elasticity of demand is less than 1.

When the Calculated Price Elasticity of Demand Is -0