Which statement is true about elastic demand?

Which statement is true about elastic demand?

• A. It is unaffected by price changes.
• B. Changes in price do not impact quantity demanded significantly.
• C. It shows a significant change in quantity demanded with price changes.
• D. It remains stable even with drastic price changes.

Answer: (C)

Elastic demand refers to a situation in which the quantity demanded of a good or service responds significantly to changes in price. When the price of a product with elastic demand rises, consumers will reduce their quantity demanded substantially, and conversely, if the price falls, they will increase their demand correspondingly. This behavior reflects the sensitivity of consumers to price fluctuations, which is a key characteristic of elastic demand. In contrast, the other statements describe characteristics of inelastic demand. For instance, saying it is unaffected by price changes or that changes in price do not impact quantity demanded significantly both relate to inelastic demand, where consumers continue to buy about the same amount regardless of price changes. The idea that demand remains stable even with drastic price changes also aligns with inelastic demand, where the quantity demanded does not vary much despite changes in price. Thus, the correct choice highlights the nature of elastic demand and its significant responsiveness to price fluctuations, which is critical for understanding consumer behavior in economic terms.

Elastic demand refers to a situation in which the quantity demanded of a good or service responds significantly to changes in price. When the price of a product with elastic demand rises, consumers will reduce their quantity demanded substantially, and conversely, if the price falls, they will increase their demand correspondingly. This behavior reflects the sensitivity of consumers to price fluctuations, which is a key characteristic of elastic demand.

In contrast, the other statements describe characteristics of inelastic demand. For instance, saying it is unaffected by price changes or that changes in price do not impact quantity demanded significantly both relate to inelastic demand, where consumers continue to buy about the same amount regardless of price changes. The idea that demand remains stable even with drastic price changes also aligns with inelastic demand, where the quantity demanded does not vary much despite changes in price.

Thus, the correct choice highlights the nature of elastic demand and its significant responsiveness to price fluctuations, which is critical for understanding consumer behavior in economic terms.