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A price elasticity of demand value of 0.5 indicates that the demand is:
- a)Perfectly elastic.
- b)Unitary elastic.
- c)Inelastic.
- d)Perfectly inelastic.
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
A price elasticity of demand value of 0.5 indicates that the demand is...
Price Elasticity of Demand Value of 0.5
Price elasticity of demand (PED) measures the responsiveness of quantity demanded to a change in price. A PED value of 0.5 indicates that the demand is inelastic.
What is Inelastic Demand?
- Inelastic demand means that the quantity demanded changes relatively less compared to the change in price.
- This suggests that consumers are not very sensitive to price changes.
Characteristics of Inelastic Demand
- Inelastic demand typically occurs for essential goods or services that are necessities.
- Consumers may continue to purchase these goods even if the price increases.
- The percentage change in quantity demanded is less than the percentage change in price.
Implications of a PED Value of 0.5
- A PED value of 0.5 indicates that a 1% increase in price will result in a 0.5% decrease in quantity demanded.
- This shows that demand is relatively unresponsive to price changes, leading to inelastic demand.
Conclusion
In conclusion, a price elasticity of demand value of 0.5 suggests that the demand is inelastic, meaning that consumers are not very sensitive to price changes for the product or service in question.
Price elasticity of demand (PED) measures the responsiveness of quantity demanded to a change in price. A PED value of 0.5 indicates that the demand is inelastic.
What is Inelastic Demand?
- Inelastic demand means that the quantity demanded changes relatively less compared to the change in price.
- This suggests that consumers are not very sensitive to price changes.
Characteristics of Inelastic Demand
- Inelastic demand typically occurs for essential goods or services that are necessities.
- Consumers may continue to purchase these goods even if the price increases.
- The percentage change in quantity demanded is less than the percentage change in price.
Implications of a PED Value of 0.5
- A PED value of 0.5 indicates that a 1% increase in price will result in a 0.5% decrease in quantity demanded.
- This shows that demand is relatively unresponsive to price changes, leading to inelastic demand.
Conclusion
In conclusion, a price elasticity of demand value of 0.5 suggests that the demand is inelastic, meaning that consumers are not very sensitive to price changes for the product or service in question.
Community Answer
A price elasticity of demand value of 0.5 indicates that the demand is...
A price elasticity of demand value of 0.5 indicates that the demand is inelastic. Inelastic demand means that a change in price has a relatively smaller effect on the quantity demanded. When the price elasticity of demand is less than 1, it indicates inelastic demand.
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A price elasticity of demand value of 0.5 indicates that the demand is:a)Perfectly elastic.b)Unitary elastic.c)Inelastic.d)Perfectly inelastic.Correct answer is option 'C'. Can you explain this answer? for JAMB 2025 is part of JAMB preparation. The Question and answers have been prepared according to the JAMB exam syllabus. Information about A price elasticity of demand value of 0.5 indicates that the demand is:a)Perfectly elastic.b)Unitary elastic.c)Inelastic.d)Perfectly inelastic.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for JAMB 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A price elasticity of demand value of 0.5 indicates that the demand is:a)Perfectly elastic.b)Unitary elastic.c)Inelastic.d)Perfectly inelastic.Correct answer is option 'C'. Can you explain this answer?.
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