If the price elasticity of demand for a product measures 0.45, then:
A) this good has many available substitutes.
B) this good must be a non-essential good.
C) this good is a high-priced good.
D) this good is demand price inelastic.

Question

Quizplus · Accepted Answer

A price elasticity of demand of 0.45 indicates that the product is demand price inelastic, meaning that a change in price will result in a proportionally smaller change in quantity demanded. This suggests that the product is likely an essential or highly valued good for consumers and does not have easily available substitutes.

If the Price Elasticity of Demand for a Product Measures