Question
If the Price Elasticity of Demand is -1/2, we can say that: Demand is inElastic Demand...
If the Price Elasticity of Demand is -1/2, we can say that:
|
Demand is inElastic |
||
|
Demand is Elastic |
||
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Demand is perfectly Elastic |
||
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Demand is perfectly inElastic |
Homework Answers
Answer #1
When the value of the price elasticity of demand is greater than 1 then the demand is said to be elastic.
When the value of the price elasticity of demand is less than 1 then the demand is said to be inelastic.
When the value of the price elasticity of demand is 0 then demand is said to be perfectly inelastic.
When the value of the price
elasticity of demand is 
(infinity) then demand is said to be perfectly elastic.
In the given case, the value of the price elasticity of demand is -1/2 or -0.5.
The value of the price elasticity of demand is less than 1.
So,
We can say that demand is inelastic.
Hence, the correct answer is the option (1) [Demand is in Elastic].
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