Question : Elasticity (e) expressed by the formula 1 > e > 0 is
Option 1: Perfectly elastic
Option 2: Relatively elastic
Option 3: Perfectly inelastic
Option 4: Relatively inelastic
Correct Answer: Relatively inelastic
Solution : The correct answer is Relatively inelastic.
When expressed by the formula 1 > e > 0, the elasticity (e) is relatively inelastic. Elasticity is the ability of a variable to respond to changes when other factors remain constant. When demand is Relatively inelastic, there will be more change in a good or service's price than in its level of demand.
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