If the demand for product X is inelastic,a 4 percent increase in the price of X:
A)decreases the quantity demanded of X by more than 4 percent
B)decreases the quantity demanded of X by less than 4 percent
C)increases the quantity demanded of X by more than 4 percent
D)increases the quantity demanded of X by less than 4 percent
E)does not affect the quantity demanded of X

Question

Quizplus · Accepted Answer

When demand for a product is inelastic, it means that consumers are not very responsive to changes in price. Therefore, a 4 percent increase in the price of X would lead to a decrease in the quantity demanded of X, but since demand is inelastic, this decrease would be less than 4 percent. In other words, consumers would continue to buy X even though it is slightly more expensive than before.

If the Demand for Product X Is Inelastic,a 4 Percent