Assume the demand for a good is price inelastic, i.e., e_d

Name: Assume the demand for a good is price inelastic, i.e., e d < 1. This means that if price decreases by 50 percent, quantity demanded will: A) increase by more than 50 percent. B) decrease by more than 50 percent. C) increase by less than 50 percent. D) decrease by less than 50 percent.
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Question

Assume the demand for a good is price inelastic, i.e., e_d< 1. This means that if price decreases by 50 percent, quantity demanded will: A) increase by more than 50 percent. B) decrease by more than 50 percent. C) increase by less than 50 percent. D) decrease by less than 50 percent.

Quizplus · Accepted Answer

When demand is price inelastic, the percentage change in quantity demanded is less than the percentage change in price.

Assume the Demand for a Good Is Price Inelastic, I