If the coefficient of price elasticity of demand is 0.1, demand is
ECONOMICS
WAEC 2014
If the coefficient of price elasticity of demand is 0.1, demand is
- A. elastic
- B. inelastic
- C. zero elastic
- D. unitary elastic
Correct Answer: B. inelastic
Explanation
The numerical values for the PED coefficient could range from zero to infinity. In general, the demand for a good is said to be inelastic (or relatively inelastic) when the PED is less than one (in absolute value): that is, changes in price have a less than proportional effect on the quantity of the good demanded.
Post an Explanation Or Report an Error
If you see any wrong question or answer, please leave a comment below and we'll take a look. If you doubt why the selected answer is correct or need additional more details? Please drop a comment or Contact us directly. Your email address will not be published. Required fields are marked *