The price elasticity of demand for bottled water in New York is -3, and the price elasticity of demand for bottled water in Florida is -0.6. In other words, demand in New York is ________ and demand in Florida 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 demand is considered elastic if the absolute value of the price elasticity of demand is greater than 1, meaning consumers are relatively responsive to price changes. In contrast, demand is inelastic if the absolute value is less than 1, meaning consumers are less responsive to price changes. Since -3 (for New York) is less than -1 and -0.6 (for Florida) is greater than -1, demand in New York is elastic, and demand in Florida is inelastic.

The Price Elasticity of Demand for Bottled Water in New