Along an inelastic demand curve, the a) Change in price will always be less than the change in quantity demanded

1. Along an inelastic demand curve, the

d. Percentage change in price will be more than the percentage change in quantity demanded.

When the product has an inelastic demand, the consumers are less sensitive to fluctuations in price. For instance, 20% change in price can result in 6% change in quantity demanded. Examples of products with inelastic demand include petrol, salt, and cigarettes.

2. When a firm's price cut produces a smaller than proportional increase in quantity demanded, the demand for its product is

b. Inelastic

On the graph, when a firm reduces the price from $8 to $3, the quantity demanded increases by only one unit, that is, from 3 to 4. Such product is said to have an inelastic demand.

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