The more quantity demanded responds to a change in the price of that good the _____ is for that good.
A) more elastic demand
B) less elastic demand
C) more elastic supply
D) less elastic supply

Question

Quizplus · Accepted Answer

If the quantity demanded of a good responds significantly to a change in its price, then the demand for that good is said to be elastic. This means that consumers are very sensitive to changes in price and a small change in price results in a significant change in the quantity demanded. When the demand is elastic, an increase in price results in a decrease in total revenue, while a decrease in price results in an increase in total revenue. Therefore, if the quantity demanded responds to a change in price, the demand for the good is more elastic.

The More Quantity Demanded Responds to a Change in the Price