If the price doubles and causes consumers to cut in half the amount bought, the demand is?

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Prepare for the Abeka Economic Test to excel in economic concepts. With flashcards, multiple choice questions, hints, and explanations, ensure you're ready to ace your exam! Focus on fundamental economic principles and analysis.

Multiple Choice

If the price doubles and causes consumers to cut in half the amount bought, the demand is?

Price elasticity of demand measures how much buyers change the quantity they buy in response to a price change. Here, price doubles, a 100% increase, while quantity demanded falls by 50%. Elasticity is the percentage change in quantity demanded divided by the percentage change in price: 50% / 100% = 0.5 (the sign is negative because price and quantity move in opposite directions). An elasticity with magnitude less than 1 means inelastic demand, so the demand is inelastic.

If the price doubles and causes consumers to cut in half the amount bought, the demand is?

Prepare for the Abeka Economic Test to excel in economic concepts. With flashcards, multiple choice questions, hints, and explanations, ensure you're ready to ace your exam! Focus on fundamental economic principles and analysis.

If the price doubles and causes consumers to cut in half the amount bought, the demand is?

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