Elastic demand for housing in a submarket means that:
Correct Answer
A) Quantity demanded changes by a larger percentage than price does
Elastic demand means the absolute percentage quantity response exceeds the percentage price change, other determinants unchanged. Available substitutes can influence responsiveness but do not define elasticity by themselves. Supply response and fixed prices are different concepts.
Why This Is the Correct Answer
Elastic demand means the absolute percentage quantity response exceeds the percentage price change, other determinants unchanged. Available substitutes can influence responsiveness but do not define elasticity by themselves. Supply response and fixed prices are different concepts.
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