Price Elasticity of Demand Quiz

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5 Questions

When is demand for a good considered inelastic?

When the elasticity is less than one in absolute value

What does a price elasticity of -2 indicate?

A one percent price rise leads to a two percent decline in quantity demanded

What does 'more elastic' mean in terms of price elasticity?

A good's elasticity has greater magnitude, ignoring the sign

Which goods are rare exceptions to the law of demand with positive elasticity?

Veblen and Giffen goods

What does a negative price elasticity indicate?

$E_d$ is negative except in special cases

Test your knowledge of price elasticity of demand with this quiz. Learn about how sensitive quantity demanded is to price changes and the calculation of price elasticity.

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