A steel mill raises the price of steel by 7%, which results in a 20% reduction in the quantity of steel demanded. The demand curve facing this firm is:

Name: A steel mill raises the price of steel by 7%, which results in a 20% reduction in the quantity of steel demanded. The demand curve facing this firm is:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The fact that a 7% increase in price leads to a 20% reduction in quantity demanded indicates that the demand is responsive to changes in price, making it elastic.

A Steel Mill Raises the Price of Steel by 7