If demand is inelastic A. then demand is infinite. B. then it changes significantly in response to a price change. C. then it changes very little in response to a price change. D. then demand is zero.

Question

Social Studies

Kenya Sims

13 January, 19:57

If demand is inelastic A. then demand is infinite. B. then it changes significantly in response to a price change. C. then it changes very little in response to a price change. D. then demand is zero.

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Answers (1)

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Regan Barron · Answer 1

Option C, then it changes very little in response to a price change.

Explanation:

The basic law of demand is that a fall in the price of a good increases the quantity of the goods demanded, and increase in price leads to a decrease in quantity of the goods demanded.

However, there is only a slight change in the quantity of demand when there is inelastic demand in the market. This is because inelastic demand occurs when the buyer's demand does not change as much as the price changes. This situation normally occurs with basic household products and services which are necessary.

Thus, demand is said to be inelastic if the quantity demanded responds only slightly to the change in price. It indicates that the percentage in price is greater than the percentage in quantity demanded.