Demand is inelastic if
A)a small change in price results in a large change in quantity demanded.
B)the quantity demanded is very responsive to a change in price.
C)the price elasticity of demand is 0.2.
D)the price does not change when supply increases.
E)a 10 percent change in price results in a 1 percent change in the quantity supplied.

Question

Quizplus · Accepted Answer

Inelastic demand is characterized by a low price elasticity of demand, which is indicated by a numerical value less than one. A price elasticity of demand of 0.2 is very low, indicating that a change in price will result in only a small change in quantity demanded. Choices A, B, D, and E describe characteristics that are not related to inelastic demand.

Demand Is Inelastic If