If the price elasticity of demand is -1.2, economists would say the demand is:
A) elastic.
B) inelastic.
C) unit elastic.
D) unelastic.

Question

Quizplus · Accepted Answer

A price elasticity of demand of -1.2 indicates that a 1% increase in price would lead to a 1.2% decrease in quantity demanded. Since the elasticity value is greater than 1, this shows that demand is responsive to changes in price and therefore considered elastic. This means that consumers are sensitive to price changes and will significantly change their quantity demanded in response to a change in price.

If the Price Elasticity of Demand Is -1