If the absolute value of the price elasticity of demand for a good is 1.5, the good has a(n):
A) elastic demand.
B) inelastic demand.
C) unit elastic demand.
D) unit inelastic demand.

Question

Quizplus · Accepted Answer

A price elasticity of demand greater than 1 indicates that the quantity demanded is highly responsive to changes in price, which means that a small change in price leads to a large change in quantity demanded. This is characteristic of goods with elastic demand.

If the Absolute Value of the Price Elasticity of Demand