If a 5 percent reduction in the price of a commodity results in a 3 percent increase in the quantity demanded, demand is said to be:
A) unstable.
B) price inelastic.
C) price elastic.
D) unit price elastic.

Question

Quizplus · Accepted Answer

Demand is considered price inelastic when the percentage change in quantity demanded is less than the percentage change in price, indicating that consumers are not very responsive to price changes.

If a 5 Percent Reduction in the Price of a Commodity