Question

With increase in price of burgers by 22%, its demand falls by 25%. This indicates that demand for burgers is ______.

Options

• Elastic

• Inelastic

• Unitary elastic

• Perfectly elastic

Answer 1

With increase in price of burgers by 22%, its demand falls by 25%. This indicates that demand for burgers is Elastic.

Explanation:

The elasticity magnitude is `((25%)/(22%))`, which is greater than one. Thus, demand is elastic, but not perfectly elastic.