Demand is inelastic only if
A)price elasticity has an absolute value of 1
B)price elasticity has an absolute value greater than 1
C)price elasticity has an absolute value less than 1
D)price elasticity is negative
E)consumers do not respond to a change in price

Question

Quizplus · Accepted Answer

Demand is considered inelastic if a change in price leads to a relatively smaller change in quantity demanded. This implies that the absolute value of price elasticity is less than 1. If the absolute value of price elasticity is 1 or greater, demand is considered elastic. Therefore, option C is the correct answer.

Demand Is Inelastic Only If