Demand is inelastic if
A) a given percentage change in price will result in a less than proportionate percentage change in the quantity demanded.
B) demand exhibits zero responsiveness to price changes.
C) small price increases will lead to zero quantity demanded.
D) a given percentage change in price will result in a greater than proportionate percentage change in the quantity demanded.

Question

Quizplus · Accepted Answer

Inelastic demand means that a change in price will not have a significant impact on the quantity demanded. In other words, a given percentage change in price will result in a less than proportionate percentage change in the quantity demanded. This can occur when the product is a necessity or has few substitutes, making consumers less sensitive to price changes. Choice B is incorrect because demand cannot be completely unresponsive to price changes, as there will always be some level of responsiveness. Choice C is incorrect as small price increases may still result in some quantity demanded, just less than before. Choice D describes elastic demand, where a given percentage change in price will result in a greater than proportionate percentage change in the quantity demanded.

Demand Is Inelastic If