The price elasticity of demand is a negative number this means ?
Correct answer: C. The demand curve is downward sloping
- A. Demand is price elastic
- B. Demand is price inelastic
- C. The demand curve is downward sloping
- D. An increase in income will reduce the quantity demanded
Explanation
A negative price elasticity means price and quantity demanded move in opposite directions, which is represented by a downward-sloping demand curve. The sign alone does not show whether demand is elastic or inelastic.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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