Question

James sells bracelets. The price of these bracelets decreases to $8 from $10. As a result, James sells 12% more bracelets. In this case, we can say:

A. The demand for bracelets is inelastic.

B. The demand for bracelets is perfectly inelastic.

C. The demand for bracelets is elastic.

D. Bracelets are complementary goods.

E. All the other answers are incorrect.

Answer 1

C. The demand for bracelets is elastic

Explanation:

• When examining the elasticity of demand, we're observing the responsiveness of the quantity demanded to a change in price.
• In this case, when the price of bracelets decreased, the quantity demanded increased, indicating that the demand for bracelets is elastic.