If a good has an elastic demand, then:
A) a small percentage change in price will cause a larger percentage change in quantity demanded.
B) a small percentage change in price will cause virtually no change in quantity demanded.
C) a large percentage change in price will cause a smaller change in quantity demanded.
D) any percentage change in price will cause an almost immediate response in quantity demanded.

Question

Quizplus · Accepted Answer

Elastic demand means that consumers are very responsive to changes in price. As a result, a small percentage change in price will cause a larger percentage change in quantity demanded. This is the opposite of an inelastic demand where consumers are not very responsive to changes in price, and so a large percentage change in price will cause only a small change in quantity demanded.

If a Good Has an Elastic Demand, Then