When a one-percent change in price is accompanied by a larger percent change in quantity demanded,
A)demand is inelastic
B)supply is elastic
C)the good is a normal good
D)the good is an inferior good
E)demand is elastic

Question

Quizplus · Accepted Answer

When a one-percent change in price is accompanied by a larger percent change in the quantity demanded, it indicates that the good has a high price elasticity of demand. This means that consumers are highly responsive to changes in price, and a small change in price leads to a larger change in the quantity demanded. Therefore, the correct answer is E - demand is elastic.

When a One-Percent Change in Price Is Accompanied by a Larger