If the price of a good decreases by 5% and the quantity demanded increases by 10%, then at that price, the good is

Question

Quizplus · Accepted Answer

If the quantity demanded increases by more than the percentage decrease in the price, the good is considered elastic. In this case, the quantity demanded increased by 10% while the price only decreased by 5%. This indicates that consumers are quite sensitive to changes in price, and the good is relatively elastic.

If the Price of a Good Decreases by 5% and the Quantity