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According to the source, when is demand or supply classified as inelastic?
AWhen the elasticity is less than one
BWhen the elasticity is greater than one
CWhen the elasticity is exactly one
DWhen the elasticity is infinite
Answer & Solution
Correct answer: A. When the elasticity is less than one
1. Inelastic demand or supply describes low responsiveness of quantity to a price change.
2. Table 5.1 assigns this label whenever the calculated elasticity value is less than one.
3. A value greater than one is elastic, and exactly one is unitary, so neither matches inelastic.
4. Infinite elasticity is the separate extreme case of perfect elasticity, not ordinary inelastic demand.
_Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 5 "Elasticity", section 5.1 | Price Elasticity of Demand and Price Elasticity of Supply_
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