In economics, if a good is inelastic, its supply or demand is not sensitive to p

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Question
In economics, if a good is inelastic,
Options
A. its supply or demand is not sensitive to price changes.
B. consumers have lost an interest in purchasing it.
C. producers have lost an interest in manufacturing it.
D. its supply or demand is too sensitive to price changes.

Correct Answer

its supply or demand is not sensitive to price changes.

Explanation

If the percent change in quantity demanded is less than the percent change in price, economists label the demand for the good as inelastic.

A good that is inelastic does not have very stretchy demand. In economic terms, the quantity demanded does not change a lot when the price changes.

So, if the price of a good increases by 10 percent and the quantity demanded decreases by only 5 percent or less than 10, that good is said to have inelastic demand.

Hence, in this case, consumers are not considered very sensitive, or responsive, to a change in the price of that good.

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