Recently,much of the Western United States experienced drought conditions and water usage was restricted in Denver.Yet,even though most people used less water,the price of water did not drop.When the drought was declared over,the water company raised water prices.However,the residents of Denver did not use less water.Here,water is

Question

Quizplus · Accepted Answer

Demand is price inelastic when a 1 percent decrease or increase in price produces less than a 1 percent increase or decrease in quantity demanded,thereby marginally decreasing or increasing sales revenue.Slight increases or decreases in price will not significantly affect the demand for water.

Recently,much of the Western United States Experienced Drought Conditions and Water