The price elasticity of demand for kale in Texas is -2, and the price elasticity of demand for kale in California is -0.5. In other words, demand in Texas is ________, and demand in California is ________.
A) elastic; inelastic
B) inelastic; elastic
C) elastic; unit elastic
D) inelastic; unit inelastic

Question

Quizplus · Accepted Answer

The price elasticity of demand measures how much the quantity demanded of a good responds to a change in the price of that good. A price elasticity greater than 1 (in absolute value) indicates elastic demand, meaning consumers are highly responsive to price changes. A price elasticity less than 1 (in absolute value) indicates inelastic demand, meaning consumers are less responsive to price changes. Since -2 (Texas) indicates a higher responsiveness than -0.5 (California), demand in Texas is elastic, and demand in California is inelastic.

The Price Elasticity of Demand for Kale in Texas Is