A relatively small percentage change in the price of a computer results in large percentage changes in the number of units purchased for a retailer.The price elasticity of demand for computers can be described as ________.
A) price elastic
B) unitary elasticity
C) price inelastic
D) low

Question

Quizplus · Accepted Answer

The fact that there is a large percentage change in the number of units purchased in response to a relatively small percentage change in the price indicates that the demand for computers is sensitive to price changes. This is characteristic of price elasticity of demand, which is high when there is a significant response to changes in price. Therefore, the correct answer is A) price elastic.

A Relatively Small Percentage Change in the Price of a Computer