If Pacific Power and Light increased its rates 10 percent and experienced only a 2 percent reduction in the demand for power,the demand would be

Question

Quizplus · Accepted Answer

The demand for power is inelastic because there was only a 2 percent reduction in response to a 10 percent increase in rates. Inelastic demand means that changes in price have a relatively small effect on the quantity demanded.

If Pacific Power and Light Increased Its Rates 10 Percent