Demand Is Elastic Whenever

question 189

Multiple Choice

Demand is elastic whenever

• A)price elasticity has an absolute value of 1
• B)price elasticity has an absolute value greater than 1
• C)price elasticity has an absolute value less than 1
• D)price elasticity is negative
• E)consumers respond to a change in price

---

Definitions:

Demand Heterogeneity

Describes the variation in consumers' preferences and needs, which can influence the market strategy of businesses.

Government Failure

Occurs when government intervention in the economy causes inefficiencies or leads to an allocation of resources that does not maximize societal welfare.

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.

Externality

A consequence of an economic activity experienced by unrelated third parties; can be either positive or negative.