A relatively steep demand curve indicates that a. quantity demanded will not adjust to a price change. b. quantity demanded will adjust only slightly to a price change. c. quantity demanded will adjust significantly to a price change. d. the change in quantity demanded will exactly equal a change in price.

Question

Rudy Petersen

Business

6 August, 06:57

A relatively steep demand curve indicates that a. quantity demanded will not adjust to a price change. b. quantity demanded will adjust only slightly to a price change. c. quantity demanded will adjust significantly to a price change. d. the change in quantity demanded will exactly equal a change in price.

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Answers (1)

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Daria · Answer 1

The correct answer is option b.

Explanation:

A steep demand curve implies that the demand is relatively inelastic. In other words, a significant change in price will cause a small change in the quantity demanded.

A flatter demand curve, on the contrary, implies that a small change in price will cause a greater change in quantity demanded. In other words, demand is relatively elastic.

A change in price will not cause demand to change if the elasticity of demand is perfectly inelastic or when the demand curve is a vertical line.

A change in demand will be equal to the change in price if demand is unitary elastic.