Answer to Question #237327 in Economics for CCW

Question

Demand Worksheet:

2) If a change in price has an effect on change in quantity, this is known as (elastic/inelastic) demand. Give a specific example of this type of demand.

Answer 1

If a change in price has an effect on change in quantity, this is known as elastic demand. For example, if the price of the Porsche sport cars increases by 10% and the amount of people buying these sport cars dropped by 20% (price has an effect on change in quantity), then the Porsche sport cars have an elastic demand.