To say that gasoline has a low price elasticity of demand is to say the quantity demanded of gasoline
A)has a relatively flat demand curve.
B)has a horizontal demand curve.
C)is not sensitive to changes in gasoline prices.
D)is very sensitive to changes in gasoline prices.
E)is very sensitive to changes in consumer income.

Question

Quizplus · Accepted Answer

A low price elasticity of demand means that the quantity demanded is not very sensitive to changes in price. In other words, even if the price of gasoline goes up, people will still need to buy it for transportation, and may not drastically reduce their consumption. Conversely, if the price goes down, people may not drastically increase their consumption because they may not need more gasoline than they already use.

To Say That Gasoline Has a Low Price Elasticity of Demand