We Say That a Good Has Elastic Demand Whenever the Absolute

question 348

Multiple Choice

We say that a good has elastic demand whenever the absolute value of the price elasticity of demand is greater than 1. A 1 percent change in price therefore causes

• A) exactly a 1 percent change in the quantity demanded.
• B) a change of less than 1 percent in the quantity demanded.
• C) a greater than 1 percent change in quantity demanded.
• D) a change that cannot be determined based on 1 percent.