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      Question

      When the Proportionate change in demand is more than the

      Proportionate Change in prices, the demand is known as
      A Perfectly Inelastic Demand Correct Answer Incorrect Answer
      B Inelastic Demand Correct Answer Incorrect Answer
      C Perfectly Elastic Demand Correct Answer Incorrect Answer
      D Elastic Demand Correct Answer Incorrect Answer

      Solution

      An elastic variable (with elasticity value greater than 1) is one which responds more than proportionally to changes in other variables. In contrast, an inelastic variable (with elasticity value less than 1) is one which changes less than proportionally in response to changes in other variables. 

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