If the price elasticity of demand for gasoline is 0.8 and the price elasticity of demand for plane tickets is 2.2 then the demand for gasoline is ________ and the demand for plane tickets is ________.
A) elastic; inelastic
B) inelastic; elastic
C) elastic; elastic
D) inelastic; inelastic

Question

Quizplus · Accepted Answer

The demand for gasoline is inelastic because its price elasticity of demand is less than 1 (0.8), indicating that quantity demanded is not very responsive to price changes. The demand for plane tickets is elastic because its price elasticity of demand is greater than 1 (2.2), indicating that quantity demanded is very responsive to price changes.

If the Price Elasticity of Demand for Gasoline Is 0