If the demand for good A is more elastic than the demand for good B,a small decrease in supply in both markets will cause
A)a much greater increase in price for good A than for good B
B)a much greater increase in price for good B than for good A
C)the price will increase by the same amount in both markets
D)only the price of good B will increase
E)only the price of good A will increase

Question

Quizplus · Accepted Answer

When demand is more elastic, consumers are more responsive to price changes, so a decrease in supply will lead to a smaller price increase for good A compared to good B, which has less elastic demand.

If the Demand for Good a Is More Elastic Than