If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units,then the demand is _____
A)elastic.
B)inelastic.
C)unit elastic.
D)perfectly elastic.
E)perfectly inelastic.

Question

Quizplus · Accepted Answer

The demand is inelastic because the percentage change in quantity demanded is less than the percentage change in price. Specifically, the price doubles (a 100% increase), but the quantity demanded only decreases by 20% (from 100 to 80 units). Inelastic demand indicates that consumers are not very sensitive to price changes for this product.

If an Increase in the Price of a Product from $1