Assuming price elasticity of demand is reported as an absolute value, a price elasticity of demand greater than one indicates that demand for the good is:
A) elastic.
B) inelastic.
C) unitary elastic.
D) perfectly inelastic.

Question

Quizplus · Accepted Answer

A price elasticity of demand greater than one indicates that demand for the good is elastic, meaning that a price increase will cause a relatively larger decrease in quantity demanded. This is because consumers are very responsive to changes in price and can easily switch to substitute goods.

Assuming Price Elasticity of Demand Is Reported as an Absolute