The value of the absolute price elasticity of demand for good A is 3. The absolute price elasticity for good B is 2. Which good's quantity demanded is less responsive to a change in price?
A) Good A
B) Good B
C) They are equally responsive.
D) Not enough information is given.

Question

Quizplus · Accepted Answer

Good B's absolute price elasticity of demand is lower than that of Good A, meaning that its quantity demanded is less responsive to a change in price. This is because a change in price will lead to a smaller percentage change in quantity demanded for Good B compared to Good A.

The Value of the Absolute Price Elasticity of Demand for Good