Final answer:
A 50 percent decrease in price causing only a 10 percent increase in the quantity demanded indicates that the good has inelastic demand, representing a lower sensitivity to price changes.
Step-by-step explanation:
If a 50 percent decrease in the price of a good generates a 10 percent increase in the quantity demanded, the good has inelastic demand. In the context of price elasticity of demand, this indicates that the percentage change in quantity demanded is less than the percentage change in price. Since the demand change is smaller (10%) compared to the price change (50%), the good's demand is classified as inelastic, reflecting a low responsiveness to price changes. Products with inelastic demand tend to have fewer substitutes and are often necessary goods, meaning consumers do not significantly alter their consumption levels despite price fluctuations.
The good has an inelastic demand because a 50 percent decrease in price generates only a 10 percent increase in quantity demanded. Inelastic demand means that the percentage change in demand is smaller than the percentage change in price. In this case, the quantity demanded is not very responsive to price changes.