Answer:
consumers are not very responsive to changes in price.
Explanation:
Elasticity measures the degree of responsiveness of quantity demanded to changes in price.
Demand is inelastic when consumers are not very responsive to changes in price.
The price elasticity of demand is always less than 1. The demand curve appears to be steep.
Demand is elastic when the percentage change in quantity demanded resulting from a price change is greater than the percentage change in price. Price elasticity of demand is greater than 1.
I hope my answer helps you.
Answer:
Consumers are not very responsive to changes in price.
Explanation:
Price in elasticity of demand is the responsiveness of quantity demanded when there is a change in price.
An elasticity of 1 means that the demand changes in equal proportions to that of price and thus there is usually no incentive in changing prices as the net effect is the same. This is called unity elasticity.
An inelastic demand usually is less than one, which means there is less than proportionate change in quantity demanded when there is a change in price. This is interpreted as a less responsive demand. Option 2 is correct.
An elasticity of greater than 1 will mean a more responsive demand and thus more elastic. A flat demand cure also signifies higher elasticity.
Hope that helps.
