Interpret elasticity of demand Question For a certain product, the elasticity of demand when the price is $5 is given by E(5) = 1.1. Which of the following are true? Select all correct answers. Select all that apply: Demand is elastic A price increase will increase revenue. A price increase will decrease revenue. Demand is inelastic.
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The elasticity of demand is 1.1. This means that a 1% increase in price will result in a 1.1% decrease in quantity demanded. Therefore, demand is elastic. So, "Demand is elastic" is true. Show more…
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