If the price elasticity of demand within the price range from €1 to €1.25 per kilogram for carrots is 0.79 and for radishes is 1.6, then within that price range
A) demand for carrots is more price elastic than that for radishes.
B) demand for radishes is more price elastic than that for carrots.
C) carrots and radishes must be substitute goods.
D) carrots and radishes must be complementary goods.

Question

Quizplus · Accepted Answer

A higher price elasticity of demand (PED) value indicates a more responsive demand to a change in price. As the PED value for radishes is higher than that of carrots, we can conclude that demand for radishes is more price elastic than that for carrots. Therefore, option B is the correct choice. The other options do not follow from the given information.

If the Price Elasticity of Demand Within the Price Range