Price Elasticity of Demand Classification Steps:

• Compute morning elasticity: percentage change in demand is -2%, price is +10%, so |E| = 2/10 = 0.2 < 1, inelastic.
• Compute afternoon elasticity: percentage change in demand is +7%, price is -5%, so |E| = 7/5 = 1.4 > 1, elastic.
• Classify each period based on |E|: morning inelastic, afternoon elastic.
• Match to options: inelastic elastic describes the responses.

Why B is correct:

• B matches the calculations, as price elasticity of demand is inelastic when |%ΔQ / %ΔP| < 1 (morning) and elastic when > 1 (afternoon), per standard economic definition.

Why the others are wrong:

• A: Claims both elastic, but morning |E| = 0.2 < 1 is inelastic.
• C: Claims both inelastic, but afternoon |E| = 1.4 > 1 is elastic.
• D: Duplicates B, but listed separately; does not alter the matching logic.

Final answer: B