Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Elastic demand means that quantity demanded changes significantly with price changes.
B
Inelastic demand indicates that consumers will buy the same quantity regardless of price changes.
C
If demand is unit elastic, total revenue will change when the price changes.
D
Elasticity of demand can vary for the same product in different markets.
E
Price elasticity of demand is always the same regardless of the time frame considered.
Understanding the Answer
Let's break down why this is correct
Answer
Elasticity of demand measures how much the quantity demanded of a good changes when its price changes. If a small price change leads to a big change in the quantity demanded, we say the demand is elastic. For example, if the price of a favorite snack goes up slightly and people buy much less of it, that snack has elastic demand. On the other hand, if the price of something essential, like medicine, goes up and people still buy about the same amount, that demand is inelastic. Understanding this helps businesses set prices and predict how sales will change with different pricing strategies.
Detailed Explanation
Other options are incorrect because Many think elastic demand means a small change in quantity; Some believe inelastic demand means people buy the same amount no matter what.
Key Concepts
Elasticity of Demand
Price Sensitivity
Total Revenue
Topic
Elasticity of Demand
Difficulty
easy level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.