If demand falls by 1 percent when price is increased by 2 percent,then .
A)elasticity is - 1/2
B)demand is inelastic
C)demand is elastic
D)buyers are not price sensitive
E)A and B

Question

Quizplus · Accepted Answer

Elasticity is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, it is -1%/2% = -1/2, indicating inelastic demand since the absolute value is less than 1.

If Demand Falls by 1 Percent When Price Is Increased