If Pacific Power and Light increased its rates by 10% and experienced a 2% reduction in the demand for power, the demand would be
A) elastic.
B) minimal.
C) minor elasticity.
D) variable.
E) inelastic.

Question

Quizplus · Accepted Answer

The 2% reduction in demand for power in response to a 10% increase in rates suggests that the demand is relatively unresponsive to price changes, indicating inelastic demand.

If Pacific Power and Light Increased Its Rates by 10