If a 1 Percent Decrease in Price Results in Less

question 120

Multiple Choice

If a 1 percent decrease in price results in less than a 1 percent increase in the quantity demanded, demand is

• A)cross-price elastic.
• B)price inelastic.
• C)price elastic.
• D)status quo elastic.
• E)derived demand inelastic.

---

Definitions:

Legal Markets

Markets operating within the framework of regulatory laws and norms, where transactions of goods and services occur legally.

Supply and Demand

The fundamental economic model that describes the interaction between the availability of a particular product and the desire for that product, determining its price.

Deadweight Loss

A loss of economic efficiency that occurs when the optimal level of supply and demand is not achieved.

Supply Elasticities

Measures the responsiveness of the quantity supplied of a good to a change in its price.