Under which of the following conditions are prices said to be elastic?
A)Increase in price, and little impact on sales volume.
B)Increase in price, and a sizable increase in sales volume.
C)Increase in price, and a sizeable decrease in sales volume.
D)Decrease in price, and no increase in sales volume.
E)Decrease in price, and a sizeable decrease in sales volume.

Question

Quizplus · Accepted Answer

When prices are said to be elastic, a small change in price leads to a significant change in the quantity demanded by the customers. Therefore, an increase in price that results in a sizeable decrease in sales volume would indicate the elasticity of prices.

Under Which of the Following Conditions Are Prices Said to Be