Which of the following illustrates elastic demand?
A) A 10 percent increase in price causes a 5 percent decrease in quantity demanded.
B) A 10 percent increase in price causes a 10 percent reduction in quantity demanded.
C) A 10 percent increase in price causes a 20 percent decrease in quantity demanded.
D) a price elasticity of 0.8
E) a price elasticity of 1.0

Question

Quizplus · Accepted Answer

Elastic demand is characterized by a relatively large change in quantity demanded in response to a small change in price. In this case, a 10 percent increase in the price causes a 20 percent decrease in the quantity demanded, indicating that consumers are relatively sensitive to changes in price.

Which of the Following Illustrates Elastic Demand