If the demand for product X is inelastic,a 4 percent increase in the price of X will:
A) decrease the quantity of X demanded by more than 4 percent.
B) decrease the quantity of X demanded by less than 4 percent.
C) increase the quantity of X demanded by more than 4 percent.
D) increase the quantity of X demanded by less than 4 percent.

Question

Quizplus · Accepted Answer

If the demand for a product is inelastic, it means that the consumers are not very responsive to changes in the price of the product. In other words, the percentage change in the quantity demanded is less than the percentage change in the price. So, a 4 percent increase in the price of X will not decrease the quantity of X demanded by more than 4 percent but by less than 4 percent. Therefore, option B is the correct answer.

If the Demand for Product X Is Inelastic,a 4 Percent