Which term describes demand that is not very sensitive to a change in price?

Which term describes demand that is not very sensitive to a change in price?

• A. Price Elasticity
• B. Elastic
• C. Price Floor
• D. Inelastic

Answer: (D)

Understanding how demand responds to price changes is about sensitivity, measured by price elasticity of demand. When demand is not very sensitive, the quantity people buy changes only a little as price changes. That characteristic is called inelastic demand. So the best term to describe this situation is inelastic. Elastic describes a strong response to price changes, and price elasticity is the measurement itself rather than the description. A price floor is a policy setting, not a description of sensitivity. In real life, necessities often have inelastic demand in the short run, meaning price moves don’t lead to big changes in how much is bought.

Understanding how demand responds to price changes is about sensitivity, measured by price elasticity of demand. When demand is not very sensitive, the quantity people buy changes only a little as price changes. That characteristic is called inelastic demand. So the best term to describe this situation is inelastic. Elastic describes a strong response to price changes, and price elasticity is the measurement itself rather than the description. A price floor is a policy setting, not a description of sensitivity. In real life, necessities often have inelastic demand in the short run, meaning price moves don’t lead to big changes in how much is bought.