Final answer:
Explanation of demand elasticity with examples of inelastic and elastic scenarios.
Explanation:
An example of demand elasticity is when the price of a product changes, causing a more substantial change in the quantity demanded. Specifically, when the percentage change in demand exceeds the percentage change in price, it is considered elastic.
In the given options:
- As the price of gasoline increases by 5 percent, and the demand remains constant, this is inelastic demand.
- As the price of bananas decreases by 10 percent, and the demand decreases by 10 percent, this represents an elastic demand scenario.
- As the price of penicillin decreases by 30 percent, and the demand remains constant, this implies an inelastic demand.
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