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The price elasticity of demand for a product is -0.5. You know that... Demand for this...

The price elasticity of demand for a product is -0.5. You know that...

Demand for this product is inelastic.

Demand for this product is neither elastic or inelastic. It is "unit elastic."

Demand for this product is elastic.

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Answer #1
  • Option A.
  • The price elasticity of demand refers to the change in the demand of a good with respect to its price.
  • The price elasticity of demand is usually negative due to the law of demand that is when the price increases, the quantity demanded decreases and vice versa.
  • When the price elasticity of demand is less than 1 then the good is said to be inelastic.
  • Hence the price elasticity of demand is-- 0.5, which is less than 1 . Hence the demand for this good is inelastic.
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