Asked by Ashley Eggleston on Jul 21, 2024
Verified
When demand is elastic,
A) the percentage change in price is greater than the percentage change in quantity demanded.
B) price increases raise total revenue.
C) the buyer is sensitive to changes in price.
D) the elasticity coefficient is greater than zero,but less than one.
Elastic
Refers to the responsiveness of demand or supply to changes in price or income.
Percentage Change
A mathematical calculation that represents the degree of change over time, expressed as a percentage.
Elasticity Coefficient
A numerical measure of how responsive the quantity demanded or supplied of a good or service is to changes in its price or other factors.
- Comprehend the principle of demand elasticity and its susceptibility to different influences.
- Distinguish between elastic demand and inelastic demand.
Verified Answer
TN
Tabitha NguyenJul 23, 2024
Final Answer :
C
Explanation :
When demand is elastic, small changes in price lead to large changes in quantity demanded. This indicates that buyers are very sensitive to changes in price. This sensitivity causes the demand curve to be relatively flat, indicating a high level of responsiveness to changes in price. Elasticity coefficient is always greater than 0 for all goods, but it is between 0 and 1 for elastic goods. Therefore, options A and D are not the best choices. Option B is incorrect because when demand is elastic, an increase in price actually reduces total revenue, rather than raising it.
Learning Objectives
- Comprehend the principle of demand elasticity and its susceptibility to different influences.
- Distinguish between elastic demand and inelastic demand.