If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is A. unit-elastic. B. perfectly elastic. C. relatively inelastic. D. relatively elastic.

Question

Business

Catherine Melendez

10 March, 01:45

If, for a given percentage increase in price, quantity demanded falls by a proportionately smaller percentage, then demand is A. unit-elastic. B. perfectly elastic. C. relatively inelastic. D. relatively elastic.

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Answers (1)

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Jewel Bridges · Answer 1

C. relatively inelastic.

Explanation:

As per Law of demand, if the price of goods and services increase, the demand for goods and services decreases. They are inversely proportional to the price of goods.

Relative inelastic demand: It is a situation in which the percentage change in price does not affect demand in the same proportion and if there is an increase in the price of the product, the quantity demanded does not decrease at the same percentage. Inelastic goods have very few or no substitutes available in the market, so the price does not have much impact on the demand for goods. Example: Salt, petrol, etc.