When is demand said to be inelastic?
A) when the demand curve and the supply curve do not cross
B) when the total cost and total revenue are equal at all levels of demand
C) when the calculated elasticity of demand is greater than 1
D) when the calculated elasticity of demand is less than 1

Question

Quizplus · Accepted Answer

Demand is said to be inelastic when the calculated elasticity of demand is less than 1. This means that a change in price will result in a proportionately smaller change in quantity demanded. In other words, even if the price of a good or service increases, consumers will still continue to purchase it because they perceive it to be a necessity and there are no close substitutes available.

When Is Demand Said to Be Inelastic