Question

If price falls along a segment of demand that is price inelastic, A. arrows representing the...

If price falls along a segment of demand that is price inelastic,

A.
arrows representing the price and quantity effects both point up.

B.
an arrow representing the price effect points down and is shorter than an arrow for the quantity effect.

C.
arrows representing the price and quantity effects both point down.

D.
an arrow representing the price effect points down and is longer than an arrow for the quantity effect.
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Answer #1

D. an arrow representing the price effect points down and is longer than an arrow for the quantity effect.

An inelastic demand means quantity demanded is not much responsive to price change. So, when price falls, quantity demanded does not rise much. So, the increase in quantity demanded in less than the decrease in price. So, an arrow representing the price effect points down and is longer than an arrow for the quantity effect.

A graph has been attached below for your better understanding.

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