Asked by Ciara Lawrence on May 10, 2024
Verified
If the elasticity of demand for a good is 0.2,then the demand for that good is
A) perfectly elastic.
B) elastic.
C) unit elastic.
D) inelastic.
E) perfectly inelastic.
Perfectly Inelastic
A market situation where the quantity demanded or supplied does not change in response to a change in price.
Elasticity of Demand
An indicator of the responsiveness of the quantity of a product demanded to its price alterations.
- Absorb the theory and outcomes of demand price elasticity.
Verified Answer
JL
Josmar López GuillénMay 16, 2024
Final Answer :
D
Explanation :
When the elasticity of demand for a good is less than 1 (in this case, 0.2), it means that the demand for that good is inelastic. This indicates that the quantity demanded changes by a smaller percentage than the percentage change in price.
Learning Objectives
- Absorb the theory and outcomes of demand price elasticity.