Elastic demand exists when
A)a small percentage decrease in price produces a smaller percentage increase in quantity demanded.
B)a small percentage decrease in price produces a larger percentage increase in quantity demanded.
C)an increase in price causes a larger increase in quantity demanded.
D)the quantity demanded remains the same regardless of level of price.
E)no change in in price produces a small percentage change in quantity demanded.

Question

Quizplus · Accepted Answer

Elastic demand exists when a small percentage decrease in price produces a larger percentage increase in quantity demanded. This means that consumers are very sensitive to changes in price and will greatly increase their quantity demanded when the price decreases even slightly.

Elastic Demand Exists When