If a 1 percent decrease in price results in more than a 1 percent increase in quantity demand, demand is
A) cross-price elastic.
B) price inelastic.
C) price elastic.
D) status quo elasticity.
E) derived demand inelastic.

Question

Quizplus · Accepted Answer

If a 1 percent decrease in price results in more than a 1 percent increase in quantity demand, demand is considered price elastic. This means that consumers are responsive to changes in price and will increase their quantity demanded by a larger percentage than the percentage decrease in price.

If a 1 Percent Decrease in Price Results in More