The Shoe Emporium reduces the price of its shoes by 50% and finds that the quantity demanded for its shoes increases more than 80%. The demand for shoes from The Shoe Emporium appears to be:

Question

Quizplus · Accepted Answer

The fact that a 50% reduction in price results in a more than 80% increase in quantity demanded indicates that the demand for shoes from The Shoe Emporium is elastic. Elastic demand means that a change in price leads to a proportionally larger change in quantity demanded. In this case, the increase in quantity demanded was larger than the decrease in price, indicating that consumers are quite responsive to price changes and are willing to buy more shoes when the price is lower.

The Shoe Emporium Reduces the Price of Its Shoes by 50