Question

Elon Musk realizes that the demand for Teslas is very price-elastic. Elon now knows which following statement a. the quantity consumers end up buying is not very responsive if Tesla has any price changes. b. the quantity consumers end up buying is very responsive if Tesla has any price changes. c. If Tesla has any prices changes the change in Teslas bought will not really change. d. the quantity consumers end up buying is the same at all prices.

Answer 1

Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. In this case, the quantity consumers end up buying is very responsive if the price of Teslas changes.

Step-by-step explanation:

Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. An item with price-elastic demand means that the quantity consumers end up buying is very responsive to any price changes. In this case, if the price of Teslas changes, the quantity of Teslas bought by consumers will be very responsive and change significantly. Therefore, option b. the quantity consumers end up buying is very responsive if Tesla has any price changes is the correct statement.