The terms elastic and inelastic apply to and are used to describe:
A) price elasticity of demand.
B) income elasticity of demand.
C) cross price elasticity of demand.
D) all of the above.

Question

Quizplus · Accepted Answer

The terms elastic and inelastic are most commonly used to describe price elasticity of demand, which measures the responsiveness of quantity demanded to a change in price. If demand is elastic, a small change in price will lead to a proportionally larger change in quantity demanded (i.e. demand is sensitive to price changes). If demand is inelastic, a change in price will lead to a proportionally smaller change in quantity demanded (i.e. demand is relatively insensitive to price changes). While the terms elastic and inelastic can also apply to income elasticity of demand and cross price elasticity of demand, they are most commonly associated with price elasticity of demand.

The Terms Elastic and Inelastic Apply to and Are Used