Answered

8. What does the term "elastic" describe?

A. Demand whose elasticity is exactly equal to 1

B. Demand that is very sensitive to a change in price

C. The way consumers make substitutions

D. Demand that is not very sensitive to a change in price



Answer :

GinnyAnswer

Final answer:

Elastic demand indicates high responsiveness to price changes.


Explanation:

Elastic demand describes a situation where the quantity demanded or supplied of a good shows a high responsiveness to price changes, with an elasticity greater than one. This means that small changes in price lead to proportionally larger changes in quantity demanded or supplied.

For example, if the price of a luxury item increases, consumers may significantly reduce their purchases, showing an elastic demand for that item. On the other hand, goods like necessities (e.g., food) often exhibit inelastic demand.


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