If electricity demand is inelastic,and electric rates increase,which of the following is likely to occur?
A)Quantity demanded will fall by a relatively large amount.
B)Quantity demanded will fall by a relatively small amount.
C)Quantity demanded will rise in the short run, but fall in the long run.
D)Quantity demanded will fall in the short run, but rise in the long run.

Question

Quizplus · Accepted Answer

When demand is inelastic, a change in price will result in a proportionately smaller change in quantity demanded. In other words, consumers will still need to purchase electricity despite the price increase, so a relatively small decrease in quantity demanded is expected.

If Electricity Demand Is Inelastic,and Electric Rates Increase,which of the Following