Question

When at a particular price, the percentage change in the demand for a good is less than the percentage change in the price, it is expressed as

• A. ed < 1
• B. ed > 1
• C. ed = 0
• D. ed = 1

Answer 1

The correct option is A

ed < 1

Under the percentage method, elasticity of demand is measured by the ratio of the percentage change in quantity demanded to the percentage change in price.

When at a particular price, the percentage change in the demand for a good is less than the percentage change in the price, it is expressed as e_d < 1.