Question

If, for a given percentage increase in price, quantity demanded falls by a proportionally smaller percentage, the demand is

A. perfectly elastic.

B. relatively elastic.

C. unit elastic.

D. relatively inelastic.

Answer 1

Option (D) is correct.

Step-by-step explanation:

We know that there is a inverse relationship between the price of a good and its quantity demanded.

Relative inelastic demand refers to the demand where percentage change in the quantity demanded is relatively smaller than the percentage change in price of the good.

Relative inelastic demand curve is a demand curve which is relatively steeper in shape but not perfectly inelastic or vertical.