The price elasticity of demand (absolute value) for apples is 1. Which of the following is true?Group of answer choicesAll of the aboveThe price is responsive to changes in quantity demandedNone of the aboveA change in price results in an equally proportional change in quantity demanded
Question
The price elasticity of demand (absolute value) for apples is 1. Which of the following is true?Group of answer choicesAll of the aboveThe price is responsive to changes in quantity demandedNone of the aboveA change in price results in an equally proportional change in quantity demanded
Solution
The correct answer is "A change in price results in an equally proportional change in quantity demanded".
This is because a price elasticity of demand of 1 is known as unit elastic. In this case, the percentage change in quantity demanded is exactly equal to the percentage change in price. So, if the price were to increase by 1%, the quantity demanded would decrease by 1%, and vice versa.
Similar Questions
The price elasticity of demand (absolute value) for mangoes is 2. Which of the following is true?Group of answer choicesThe quantity demanded is not very responsive to the changes in priceThe price is responsive to changes in quantity demandedThe quantity demanded is responsive to changes in priceNone of the above
The price of apples falls by 5 percent and quantity of apples demanded increases by 6 percent. We conclude that the demand for apples is Group of answer choicesunit elastic.elastic.inelastic.perfectly elastic.
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The price elasticity of demand is defined as the percentage change in the price of that good divided by the percentage change in quantity demanded for that good.Question 1AnswerTrueFalse
If the quantity demanded of a good is sensitive to a change in the price of that good, demand is said to be elastic.Question 5AnswerTrueFalse
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