Multiple Choice
Suppose the price of a good is $5 and quantity demanded is 10 units. When price increases to $6, quantity demanded decreases to 9 units. What does this indicate?
A) The quantity effect is larger than the price effect, indicating that demand is inelastic.
B) The quantity effect is larger than the price effect, indicating that demand is elastic.
C) The price effect is larger than the quantity effect, indicating that demand is inelastic.
D) The price effect is larger than the quantity effect, indicating that demand is elastic.
Correct Answer:
Verified
Correct Answer:
Verified
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