Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Consumers will drastically reduce their quantity demanded when prices increase.
B
Consumers will continue to purchase the same quantity regardless of price changes.
C
Consumers will increase their quantity demanded significantly when prices decrease.
D
Both A and C are correct.
Understanding the Answer
Let's break down why this is correct
Answer
When the demand curve is highly elastic, it means that consumers are very sensitive to changes in price. If the price of a product goes up even a little, many consumers will buy much less of it or stop buying it altogether. For example, if the price of a popular snack increases from $1 to $1. 50, people might decide to buy a different snack instead. This shows that consumers are quick to change their buying habits based on price changes.
Detailed Explanation
When demand is highly elastic, consumers react strongly to price changes. Other options are incorrect because This option suggests that consumers only reduce their purchases when prices rise; This option implies that consumers ignore price changes.
Key Concepts
market equilibrium
graphical representation of demand curves
Topic
Understanding Demand Elasticity
Difficulty
medium level question
Cognitive Level
understand
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