The demand for beef can be regarded as elastic, if the percentage change in quantity is greater than the percentage of change in price.TrueFalse
Question
The demand for beef can be regarded as elastic, if the percentage change in quantity is greater than the percentage of change in price.
True
False
Solution
Analysis of the Statement
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Understanding Elasticity:
- In economics, price elasticity of demand measures how much the quantity demanded of a good responds to a change in the price of that good. It is defined as the percentage change in quantity demanded divided by the percentage change in price.
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Elastic Demand:
- Demand is classified as elastic when the absolute value of the price elasticity of demand is greater than 1. This means that the percentage change in quantity demanded is greater than the percentage change in price.
Conclusion
The statement is indeed True. If the percentage change in quantity demanded is greater than the percentage change in price, the demand for beef is considered elastic. Specifically, the elasticity is greater than 1, indicating that consumers are significantly responsive to price changes.
Similar Questions
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