if-a-products-price-elasticity-of-demand-is-calculated-to-be-12-what-can-be-infe

Question

If a product's price elasticity of demand is calculated to be 1.2, what can be inferred about the sensitivity of demand to price changes?

Accepted Answer

Demand is elastic and sensitive to price changes.

Answer

Demand is inelastic and not very sensitive to price changes.

Answer

Demand is unit elastic and equally sensitive to price changes.

Answer

Demand is perfectly elastic and infinitely sensitive to price changes.