alleryStart learning →Table 5.2 in housing with a demand elasticity of 0.12, the lowest value in the table. How should this value be classified?
AHighly elastic
BExactly unit elastic
CInfinitely elastic
DHighly inelastic
Answer & Solution
Correct answer: D. Highly inelastic
1. An elasticity value of 0.12 is far below one.
2. Any value below one is classified as inelastic, and a value this small counts as highly inelastic.
3. Housing is a necessity, and necessities such as housing tend to be inelastic.
4. A value of exactly one would be unit elastic, and elastic values are above one, so neither describes 0.12.
_Source: OpenStax Principles of Microeconomics for AP Courses (CC BY 4.0), Ch 5 "Elasticity", section 5.3 | Elasticity and Pricing_
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