When Is Demand Said to Be Inelastic

question 50

Multiple Choice

When is demand said to be inelastic

• A)if the quantity demanded changes only slightly when the price of the good changes
• B)if demand shifts only slightly when the price of the good changes
• C)if buyers respond substantially to changes in the price of the good
• D)if the price of the good responds only slightly to changes in demand

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Definitions:

Variable Inputs

Refers to inputs used in production that can be adjusted in the short term to meet changes in output levels, such as labor or raw materials.

Returns To Scale

A concept in economics that describes how a proportionate increase in all inputs affects the level of output.

Variable Cost

A cost that increases when the firm increases its output and decreases when the firm reduces its output.

Short Run

Describes a period during which at least one factor of production is fixed, limiting the ability of a firm to adjust to changes in market demand or supply conditions.