Consumers are price inelastic when a percentage: Question 18 options: a) change in demand does not exceed a percentage change in price. b) change in price does not exceed a percentage change in revenue. c) change in revenue does not exceed a percentage change in cost. d) decrease in price is offset by an increase in demand.

Question

Rich

Business

14 July, 06:24

Consumers are price inelastic when a percentage: Question 18 options: a) change in demand does not exceed a percentage change in price. b) change in price does not exceed a percentage change in revenue. c) change in revenue does not exceed a percentage change in cost. d) decrease in price is offset by an increase in demand.

+2

Answers (1)

Know the Answer?

Ben Meyers · Answer 1

a.) change in demand does not exceed a percentage change in price.

Explanation:

Price elasticity in itself is used to evaluate how quantity demanded or supplied of a good responds to its price. Price inelasticity specifically occurs when there is only a small change in the quantity demanded of goods and services if there is a change in price. One percentage change in its price will lead to less than 1% change in the quantity demanded. An example of a good that has inelastic demand is gas. People who own cars would need gas so even if price goes up, the decrease in demand will be small.