Which of the following would indicate an elasticity of demand for a necessity?
A)0.5
B)1.5
C)2.5
D)5

Question

Quizplus · Accepted Answer

Necessities tend to have less price elasticity of demand, meaning that changes in price have less of an impact on the quantity demanded. A price elasticity of demand of 0.5 indicates that a 1% increase in price would lead to a 0.5% decrease in quantity demanded, suggesting that the good is relatively inelastic and likely a necessity.

Which of the Following Would Indicate an Elasticity of Demand