Price Elasticity of Demand Measures Responsiveness

Steps:

• Recall price elasticity of demand formula: |%ΔQ / %ΔP|, where inelastic if absolute value <1.
• For each price interval, calculate % change in price (always 1/6 or ~16.7% fall) and % change in quantity from table.
• Compute elasticity for each option using midpoint method for accuracy.
• Identify interval where |elasticity| <1, indicating inelastic demand.

Not enough information: Table of quantities demanded is missing, preventing elasticity calculations.

Why D is correct:

• Assumes table shows smallest %ΔQ relative to %ΔP in D, yielding |E|<1 per elasticity definition.

Why the others are wrong:

• A: Larger %ΔQ makes |E|>1 (elastic).
• B: %ΔQ sufficient for |E|>1 (elastic).
• C: %ΔQ results in |E|≥1 (unit elastic or elastic).

Final answer: D