If a 5 percent increase in price leads to an 8 percent decrease in quantity demanded,demand is _____
A)perfectly elastic.
B)elastic.
C)unit elastic.
D)inelastic.
E)perfectly inelastic.

Question

Quizplus · Accepted Answer

The fact that a small increase (5 percent) in price leads to a relatively larger decrease (8 percent) in quantity demanded indicates a elastic demand. In other words, consumers are quite responsive to changes in price, which leads to a larger change in the quantity demanded.

If a 5 Percent Increase in Price Leads to an 8