If the absolute price elasticity of demand for a product is greater than 1, then
A. the absolute price elasticity of demand is inelastic and consumers are relatively sensitive to price changes.
B. the absolute price elasticity of demand is inelastic and consumers are relatively insensitive to price changes.
C. the absolute price elasticity of demand is elastic and consumers are relatively insensitive to price changes.
D. the absolute price elasticity of demand is elastic and consumers are relatively sensitive to price changes.
Answer: D
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The elasticity of output with respect to capital
A) is the increase in output resulting from an increase in the capital stock. B) is the percentage increase in output resulting from a 1 % increase in the capital stock. C) is always greater than one. D) is the inverse of the elasticity of output with respect to labor.
If the demand for pizza increases, then as a result, it is highly likely that the demand for:
A. soda will increase. B. mozzarella cheese will increase. C. chicken nuggets will fall. D. All of these are a likely result.
Professor Cowen says that _______ is one of the biggest personal and social costs of a recession.
A. reduced savings B. rising interest rates C. unemployment D. inflation
An oligopolist's demand curve is
A) identical to that of a perfectly competitive firm. B) identical to that of a monopolistically competitive firm. C) vertical on a price-quantity diagram. D) unknown because a response of firms to price changes by rivals is uncertain.