Asked by arianna denn-thiele on Jul 18, 2024
Verified
Which of the following is not characteristic of the demand for a commodity that is elastic?
A) The relative change in quantity demanded is greater than the relative change in price.
B) Buyers are relatively sensitive to price changes.
C) Total revenue declines if price is increased.
D) The elasticity coefficient is less than one.
Elasticity Coefficient
A measure that quantifies the responsiveness of the quantity demanded or supplied of a good to a change in one of its determinants, such as price.
Relative Change
The measure of change in a variable relative to its initial value, often expressed as a percentage.
- Establish the conditions under which demand is deemed elastic or inelastic.
Verified Answer
ML
Michael LernerJul 20, 2024
Final Answer :
D
Explanation :
The elasticity coefficient for a commodity that is elastic must be greater than one, indicating that the percent change in quantity demanded is greater than the percent change in price.
Learning Objectives
- Establish the conditions under which demand is deemed elastic or inelastic.