The quantity demanded of your firm's product increased only 5% when the price of each unit was reduced by 33%.This is an example of what type of demand
A) Elastic
B) Coefficient
C) Unitary
D) Inelastic
E) None of the above

Question

Quizplus · Accepted Answer

The fact that the quantity demanded only increased by 5% despite a 33% price reduction means that the demand for the product is relatively unresponsive to changes in price. This is characteristic of inelastic demand. Inelastic demand occurs when changes in price have a relatively small effect on the quantity demanded.

The Quantity Demanded of Your Firm's Product Increased Only 5