Which of the following illustrates elastic demand?
A) a price elasticity of 1.0.
B) A 5 percent increase in price causes a 10 percent decrease in quantity demanded.
C) A 5 percent increase in price causes a 2.5 percent decrease in quantity demanded.
D) A 10 percent increase in price causes a 10 percent reduction in quantity demanded.
E) a price elasticity of 0.8.

Question

Quizplus · Accepted Answer

Elastic demand is characterized by a relatively large change in quantity demanded in response to a small change in price. Option B shows that a small 5 percent increase in price caused a large 10 percent decrease in quantity demanded, indicating elasticity.

Which of the Following Illustrates Elastic Demand