In the study of the demand for fast food, the price elasticity of demand was estimated to be:
A) statistically significant and elastic.
B) statistically significant and inelastic.
C) statistically significant and unitary elastic.
D) zero.

Question

Quizplus · Accepted Answer

The price elasticity of demand measures the responsiveness of quantity demanded to changes in price. A statistically significant and elastic price elasticity of demand means that a 1% increase in price will lead to a greater than 1% decrease in quantity demanded. This suggests that consumers are sensitive to changes in price and will reduce their consumption of fast food if the price increases.

In the Study of the Demand for Fast Food, the Price