An elastic demand indicates that
A) quantity demanded does not vary with changes in the price.
B) relatively small changes in price lead to relatively large changes in quantity demanded.
C) relatively large changes in price are required to obtain a relatively small change in quantity demanded.
D) relatively large changes in quantity demanded lead to relatively large changes in price.

Question

Quizplus · Accepted Answer

Elastic demand refers to a situation where a change in price leads to a relatively larger change in quantity demanded. This means that consumers are sensitive to changes in price and will adjust their quantity demanded significantly in response to even small changes in price. Conversely, if demand is inelastic, quantity demanded is relatively insensitive to changes in price.

An Elastic Demand Indicates That