The local bakery calculates the price elasticity of demand for its cinnamon rolls to be -1.25.This tells the owners that demand is ________ and price is ________ to the buyer.
A) inelastic; less important than the quantity
B) elastic; more important than the quantity
C) unitary elastic; on the same level as quantity
D) perfectly inelastic; everything
E) perfectly elastic; meaningless

Question

Quizplus · Accepted Answer

A price elasticity of demand of greater than 1 indicates that demand is elastic, meaning that price is more important than the quantity to the buyer.

The Local Bakery Calculates the Price Elasticity of Demand for Its