If demand for a good is price elastic, then the price elasticity will be:
A) equal to one.
B) equal to zero.
C) greater than one.
D) less than one.
E) less than zero.

Question

Quizplus · Accepted Answer

If demand for a good is price elastic, it means that a small change in price leads to a relatively larger change in quantity demanded. This is reflected in the formula for price elasticity of demand, which is the percentage change in quantity demanded divided by the percentage change in price. If this ratio is greater than one, it indicates that demand is price elastic. Therefore, the answer is C, greater than one.

If Demand for a Good Is Price Elastic, Then the Price