Question

Elastic demand implies that a one percent increase in price results in a larger than one percent decrease in quantity demanded. that a one percent decrease or increase in price induces no change in total revenue. that a one percent increase in price results in a smaller than one percent decrease in quantity demanded. that a one percent cut in price results in a larger than one percent increase in quantity demanded. Question 4 (1 point) A perfectly elastic demand curve O has a slope of -1. shows that a slight change in income will lead to a large reduction in price. shows that a slight increase in price will reduce quantity demanded to zero. is a horizontal line drawn across from the quantity axis.

Answer 1

Answer 1) Elastic demand implies that a one percent increase in price results in a larger than one percent decrease in quantity demanded. Elastic demand is when the percentage change in the quantity demanded exceeds the percentage change in price.

Hence Option A is the correct answer.

2) When the demand is perfectly elastic, it demonstrates that the demand curve is horizontal and a rise in the price of the product leads to the elimination of entire demand i.e. the quantity demanded reduces to zero.

Hence option C is the correct answer.

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