An auto dealership reduced the price of its new SUVs by $3,000 in hopes of generating more sales.However,the lower price only resulted in a few more sales of the vehicle.This represents an elastic demand situation.

Question

Quizplus · Accepted Answer

If the lower price only resulted in a few more sales of the vehicle, then it suggests that the demand for the SUVs is relatively inelastic, meaning that changes in price have little effect on the quantity demanded. Therefore, the statement represents an inelastic demand situation, not an elastic one.

An Auto Dealership Reduced the Price of Its New SUVs