If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then demand is:
A) elastic.
B) inelastic.
C) unitary elastic.
D) horizontal.

Question

Quizplus · Accepted Answer

The demand is inelastic because the percentage change in quantity demanded is less than the percentage change in price, indicating that consumers are relatively insensitive to price changes in this range.

If an Increase in the Price of a Product from $1