Question

the percentage change in quantity demanded is 1 percent greater than the percentage change in price. the percentage change in quantity demanded is equal to the percentage change in price. the percentage change in quantity demanded is 100 percent greater than the percentage change in price (in absolute value). quantity demanded does not respond to changes in price.

Answer 1

Answer:

This refers to price elasticity of demand.

Explanation:

The price elasticity of demand (PED) measures how much does the quantity demanded of a good or service changes proportionally to a 1% change in the price of the good or service.

-the percentage change in quantity demanded is 1 percent greater than the percentage change in price.

• ELASTIC DEMAND: when the change in quantity demanded is proportionally greater than the change in price.

-the percentage change in quantity demanded is equal to the percentage change in price.

• PRICE UNITARY DEMAND: e.g. if the price increases by 10%, the demand decreases by 10% (the same proportion).

-the percentage change in quantity demanded is 100 percent greater than the percentage change in price (in absolute value).

• ALMOST PERFECTLY ELASTIC DEMAND: if a product has a perfectly elastic demand, any small change in price will increase or decrease the quantity demanded to either infinite (price decrease) or zero (price increase). No demand is perfectly elastic, but a demand that changes by 100% more than the price change is very similar to this concept.

-quantity demanded does not respond to changes in price.

• PERFECTLY INELASTIC DEMAND: the quantity demanded doesn't change if the price changes. This rarely happens in real life as well as the perfectly elastic demand.