Demand is elastic whenever
A)price elasticity has an absolute value of 1
B)price elasticity has an absolute value greater than 1
C)price elasticity has an absolute value less than 1
D)price elasticity is negative
E)consumers respond to a change in price

Question

Quizplus · Accepted Answer

When price elasticity has an absolute value greater than 1, it means that a small change in price will result in a relatively larger change in quantity demanded. This indicates that consumers are highly responsive to changes in price and thus demand is considered elastic.

Demand Is Elastic Whenever