question\ntrue or false?\nthe price elasticity of demand for candles is elastic because as the price of…

question\ntrue or false?\nthe price elasticity of demand for candles is elastic because as the price of candles rises by 10%, the quantity demand of candles falls by 5%.\nselect the correct answer below:\ntrue\nfalse

question\ntrue or false?\nthe price elasticity of demand for candles is elastic because as the price of candles rises by 10%, the quantity demand of candles falls by 5%.\nselect the correct answer below:\ntrue\nfalse

Answer

Explanation:

Step1: Recall elasticity formula

Price - elasticity of demand ($E_d$) = $\frac{%\text{ change in quantity demanded}}{%\text{ change in price}}$.

Step2: Calculate elasticity value

Given $%\text{ change in price}=10%$ and $%\text{ change in quantity demanded} = 5%$. So, $E_d=\frac{5%}{10%}=0.5$.

Step3: Determine elasticity type

If $E_d < 1$, demand is in - elastic. Since $0.5<1$, the demand for candles is in - elastic, not elastic.

Answer:

False