If demand is elastic and the price of a product decreases by 10 percent, then
A) the change in quantity demanded is less than 10 percent.
B) the change in quantity demanded is equal to 10 percent.
C) the change in quantity demanded is greater than 10 percent.
D) the decrease in quantity demanded is greater than 0 percent.

Question

Quizplus · Accepted Answer

If demand is elastic, a decrease in price will lead to a proportionally larger increase in quantity demanded. Therefore, the change in quantity demanded will be greater than the percentage change in price. In this case, the price decreased by 10 percent, but the change in quantity demanded is expected to be greater than 10 percent. Choice C is the only option that reflects this expectation.

If Demand Is Elastic and the Price of a Product