If a 30 per cent price increase generates a 20 per cent decrease in quantity demanded, then demand is
A) elastic.
B) inelastic.
C) perfectly inelastic.
D) unit elastic.
E) perfectly elastic.

Question

Quizplus · Accepted Answer

The demand is inelastic because the percentage change in quantity demanded (20%) is less than the percentage change in price (30%). This indicates that consumers are relatively unresponsive to price changes.

If a 30 Per Cent Price Increase Generates a 20