Question

Widgets are known to have inelastic demand when their price increases from $2 to $4. What must be true of the change in quantity demanded over this price range?

A) It increased by exactly 100 percent.
B) It decreased by exactly 100 percent.
C) It decreased by less than 100 percent.
D) It increased by more than 100 percent.
E) It decreased by an indeterminate amount.

Answer 1

C) It decrease by less than 100 percent.

Step-by-step explanation:

Because the widgets have inelastic demand, that means the demand would change less than the price change.

The price increase from $2 to $4 is a 100% increase.

Since the widget have inelastic demand, it has to be less than 100%

And this is a decrease due to the Law of Demand, which explain that the Demand Curve is an inverse relationship, meaning negative slope.

AP Microeconomics
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Answer 2

The correct answer is E. It decreased by an indeterminate amount.

Step-by-step explanation:

Economics is not an absolute science like physics or chemistry, because due to the human factor there are phenomena that cannot be expressed in specific units. Demand is characterized by a decreasing step function, in which the demand is constant over the whole area of ​​the demand function determination. Inelastic are goods that, if abandoned, would significantly impair an individual's well-being, such as certain medicines, fuel, electricity, and so on, so there is no relation between the demand and the price.