If the absolute price elasticity of demand for a product is less than 1, then
A) consumers are relatively sensitive to price changes.
B) consumers are relatively insensitive to price changes.
C) there is a positive relationship between price changes and the quality of the product.
D) producers are relatively insensitive to price changes.

Question

Quizplus · Accepted Answer

When the absolute price elasticity of demand is less than 1, it indicates that consumers are relatively insensitive to price changes. This means that a change in price does not significantly affect the quantity of the product demanded by consumers. Conversely, if the absolute price elasticity of demand is greater than 1, consumers are relatively sensitive to price changes, and a small change in price can result in a large change in the quantity demanded.

If the Absolute Price Elasticity of Demand for a Product