Question

When % change in demand is greater than % change in price, it is a case of inelastic demand. Write true or false. Give reason.

Answer 1

This statement is false.

Reasons: 

When the percentage change in quantity demanded exceeds the percentage change in price, the demand is very elastic (or substantially elastic), with an elasticity coefficient greater than one. In contrast, inelastic demand arises when the percentage change in quantity required is less than the percentage change in price, showing that consumers are relatively resistant to price variations.