Question

If a 20 percent increase in the price of Red Bull energy drinks results in a decrease in the quantity demanded of 25​ percent, demand for Red Bull is​ _______ in this range.a. inelasticb. elasticc. verticald. unit elastic

Answer 1

Answer:

Elastic

Explanation:

Elasticity = 25% / 20% = 1.25

The demand is elastic .

Demand is elastic if the coefficient of elasticity is greater than 1.

If demand is elastic, it means a change in price leads to a greater change in the quantity demanded.

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