Price elasticity of demand can be:
A) only greater than 1.
B) equal to 1, greater than 1, less than 1.
C) only less than 1.
D) only equal to 1.

Question

Quizplus · Accepted Answer

Price elasticity of demand can be equal to 1, greater than 1 or less than 1, depending on the responsiveness of quantity demanded to a change in price. If the elasticity of demand is greater than 1, it means that a small change in price will result in a relatively larger change in quantity demanded, indicating a high level of responsiveness to price changes. If the elasticity of demand is less than 1, it means that a change in price will result in a relatively smaller change in quantity demanded, indicating a low level of responsiveness to price changes. If the elasticity of demand is equal to 1, it means that a change in price will result in an equivalent change in quantity demanded, indicating unitary elastic demand.

Price Elasticity of Demand Can Be