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?

• A. Demand is elastic and sensitive to price changes.
• B. Demand is inelastic and not very sensitive to price changes.
• C. Demand is unit elastic and equally sensitive to price changes.
• D. Demand is perfectly elastic and infinitely sensitive to price changes.

Answer: (A)