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Demand is inelastic if _____ Select one: a. the absolute value of price elasticity is equal...

Demand is inelastic if _____ Select one: a. the absolute value of price elasticity is equal to 1. b. the percentage change in price is greater than the percentage change in quantity demanded. c. the absolute value of price elasticity is greater than 1. d. the percentage change in price is less than the percentage change in quantity demanded. e. the percentage change in price is equal to the percentage change in quantity demanded.

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Answer #1

Demand is said to be inelastic when the percentage change in Quantity demanded is less than percent change in price.

Option A is incorrect because the absolute value of elasticity is 1 when the percentage change in price is equal to percentage change in Quantity demanded which is called unit elastic.

Option B is Correct because if percentage change in price is more than percentage change in demand,it means that the the percentage change in Quantity demanded is less than percent change in price which is called Inelastic demand.

Option C is incorrect because if the absolute value of price elasticity is greater than 1 ,it means percentage change in Quantity demanded is more than percent change in price which means that the demand is Elastic.

Option D is included because if the percentage change in price is less than the percentage change in quantity demanded,it means that the percentage change in Quantity demanded is more than the percentage change in price which means that the demand is Elastic

Option E is incorrect because if he percentage change in price is equal to the percentage change in quantity demanded.,it means that the demand is Unit Elastic

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