When can a service be said to be price-elastic?
A)Where a large increase in price has the effect of a large increase in sales.
B)Where a large decrease in price has the effect of a small increase in sales.
C)Where a small decrease in price has the effect of a large increase in sales.
D)Where a small increase in price has the effect of a small increase in sales.
E)Where a small increase in price has the effect of a small decrease in sales.

Question

Quizplus · Accepted Answer

A service can be said to be price-elastic if a small decrease in price has the effect of a large increase in sales. This means that consumers are highly responsive to price changes and are willing to purchase more of the service when the price is lower.

When Can a Service Be Said to Be Price-Elastic