Asked by Dustin Hayes on Jul 09, 2024
Verified
When the demand elasticity of a service is ____,a small increase in price will lead to a decline of the same percentage in quantity.
A) 10
B) 1.0
C) 0.0
D) 0.1
Demand Elasticity
A measure of how much the demand for a product or service changes in response to changes in its price or other factors.
- Become acquainted with the concept and implications tied to the price elasticity of demand.
Verified Answer
AP
Aunty PaulineJul 10, 2024
Final Answer :
B
Explanation :
When the demand elasticity is 1.0, it is considered unitary elastic. This means that a small increase in price results in an equal percentage decrease in quantity demanded. For example, if the price of a service increases by 10%, the quantity demanded will decrease by 10%.
Learning Objectives
- Become acquainted with the concept and implications tied to the price elasticity of demand.