Case-Based Critical Thinking Questions
Case 10-1
You have been having some difficulty in your economics class this semester,so you have requested support from a tutor.One topic that is giving you trouble at the moment is the price elasticity of demand.
-Increasing the price of an object by 10% decreases demand by 20%.This is an example of what kind of elasticity,according to your tutor?
A) Relatively inelastic
B) Perfectly inelastic
C) Relatively elastic
D) Perfectly elastic

Question

Quizplus · Accepted Answer

The example provided shows that as the price is increased, the quantity demanded decreases by a relatively larger proportion. This is an example of relatively elastic demand, as the change in quantity demanded is relatively larger compared to the change in price.