Suppose that a 15 percent decrease in price leads to an increase in the quantity demanded of 10 percent,
A)demand is elastic.
B)demand is inelastic.
C)elasticity of demand is unitary.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

Demand is considered inelastic when the percentage change in quantity demanded is less than the percentage change in price, which is the case here (10% increase in quantity demanded vs. 15% decrease in price).

Suppose That a 15 Percent Decrease in Price Leads to an Increase