If the percentage change in quantity demanded is greater than the percentage change in price

If the percentage change in quantity demanded is greater than the percentage change in price

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Unformatted text preview: If the percentage change in quantity demanded is greater than the percentage change in price, demand is said to be price elastic , or very responsive to price changes. If the percentage change in quantity demanded is less than the percentage change in price, demand is said to be price inelastic , or not very responsive to price changes. Similarly, supply is price elastic when the percentage change in quantity supplied is greater than the percentage change in price, and supply is price inelastic when the percentage change in quantity supplied is less than the percentage change in price. The price elasticity of demand or supply will differ among goods. For example, consider a 50 percent increase in the price of two goodscandy bars and prescription medicines. While the demand for both candy bars and prescription medicines should decline in response to the price increases, the...
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