If the absolute price elasticity of demand for a product is greater than 1, then
A) the absolute price elasticity of demand is inelastic and consumers are relatively insensitive to price changes.
B) the absolute price elasticity of demand is inelastic and consumers are relatively sensitive to price changes.
C) the absolute price elasticity of demand is elastic and consumers are relatively insensitive to price changes.
D) the absolute price elasticity of demand is elastic and consumers are relatively sensitive to price changes.

Question

Quizplus · Accepted Answer

When the absolute price elasticity of demand for a product is greater than 1, it means that the percentage change in quantity demanded is greater than the percentage change in price. This indicates that demand is elastic and consumers are relatively sensitive to price changes. As a result, a small change in price could lead to a relatively large change in quantity demanded.

If the Absolute Price Elasticity of Demand for a Product