When demand is elastic
A) a proportionately small change in price leads to a proportionately large change in quantity supplied.
B) a proportionately small change in price leads to a proportionately small change in quantity supplied.
C) a proportionately small change in price leads to a proportionately large change in quantity demanded.
D) a proportionately small change in price leads to a proportionately small change in quantity demanded.

Question

Quizplus · Accepted Answer

When demand is elastic, a proportionately small change in price leads to a proportionately large change in quantity demanded. This means that consumers are sensitive to changes in price and will adjust their purchasing behavior accordingly. Alternatively, when demand is inelastic, a proportionately small change in price leads to a proportionately small change in quantity demanded, as consumers are less sensitive to price changes.

When Demand Is Elastic