An economic survey observed that,a 20 percent cut in the price of a certain line of women's clothing,almost doubled the quantity demanded of the clothing.This led economists to conclude that the demand for this line of clothing is _____.
A)very elastic
B)very inelastic
C)vertical
D)horizontal
E)inferior

Question

Quizplus · Accepted Answer

The fact that a small change in price resulted in a large change in quantity demanded indicates a high degree of price sensitivity, or elasticity, in the demand for this line of clothing. Therefore, the best choice is A, that the demand for this line of clothing is very elastic.

An Economic Survey Observed That,a 20 Percent Cut in the Price