When the price elasticity of demand is large in magnitude,a _____ increase in the price leads to a _____ reduction in the amount purchased and the demand curve is relatively ____.
A) slight; substantial; steep
B) slight; slight; flat
C) large; slight; steep
D) slight; substantial; flat

Question

Quizplus · Accepted Answer

When the price elasticity of demand is large in magnitude, it means that consumers are very responsive to price changes. Therefore, a slight increase in price leads to a substantial reduction in the amount purchased, indicating that the demand curve is relatively flat.

When the Price Elasticity of Demand Is Large in Magnitude,a