Which of the following illustrates elastic demand?
A)A 10% increase in price causes a 5% decrease in quantity demanded.
B)A 10% increase in price causes a 20% decrease in quantity demanded.
C)a price elasticity of 0.8
D)a price elasticity of 1.0
E)A 10% increase in price causes a 10% reduction in quantity demanded.

Question

Quizplus · Accepted Answer

Elastic demand is characterized by a relatively high responsiveness of quantity demanded to a change in price. A 10% increase in price causing a 20% decrease in quantity demanded indicates that consumers are highly sensitive to price changes, making their demand elastic.

Which of the Following Illustrates Elastic Demand