Demand is inelastic if _____.

[1 mark]

a large change in quantity demanded results in a small change in price

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the price elasticity of demand is greater than 1

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the quantity demanded is very responsive to changes in price

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the price elasticity of demand is less than 1

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Solution

The correct option is D the price elasticity of demand is less than 1
Ed > 1 = Elastic demand
Ed = 1 = Unit elastic demand
Ed < 1 = Inelastic demand

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