Question

When demand is inelastic:

a) Price elasticity of demand is greater than 1

b) Percentage change in quantity demanded resulting from a price change is greater than the percentage change in price

c) The slope is almost vertical

d) Demand curves appear to be fairly flat

Answer 1

The correct answer is b) Percentage change in quantity demanded resulting from a price change is greater than the percentage change in price.

Step-by-step explanation:

The correct answer is b) Percentage change in quantity demanded resulting from a price change is greater than the percentage change in price. When demand is inelastic, a small percentage change in price leads to a relatively larger percentage change in quantity demanded. In other words, demand is not very responsive to price changes, resulting in a lower price elasticity of demand.