What does the following statement imply about price elasticity of demand? "Consumers unfazed by 400 percent increase in price of table salt - grocers see no change in sales!"
A)elasticity of demand for salt is equal to one
B)demand for salt is elastic
C)salt is too narrowly defined to determine price elasticity of demand
D)demand for salt is almost perfectly inelastic in the relevant price range
E)salt is too broadly defined to determine price elasticity of demand

Question

Quizplus · Accepted Answer

The statement implies that despite a 400 percent increase in price, there was no change in sales, which indicates that the demand for salt is almost perfectly inelastic in the relevant price range. Therefore, option D is the best choice.

What Does the Following Statement Imply About Price Elasticity of Demand