Suppose the price of heating oil increases by 10%, and the quantity of heating oil demanded each day in Montauk drops by 5%. The demand for heating oil in Montauk is:
A)price elastic.
B)price inelastic.
C)price unit-elastic.
D)perfectly price inelastic.

Question

Quizplus · Accepted Answer

The demand for heating oil in Montauk is price inelastic because the percentage change in quantity demanded (5%) is less than the percentage change in price (10%). This indicates that consumers' demand for heating oil does not decrease proportionally with an increase in price.

Suppose the Price of Heating Oil Increases by 10%, and the Quantity