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If the price of gasoline increase by 10% and quantity demanded decreases by 5% the the demand for gasoline is inelastic demand
What is inelastic demand?
The cost of a product The elasticity of demand is a measure of how price sensitive the quantity sought is. When prices rise, the amount sought for practically any good reduces, but it falls more for some than for others.
Price inelasticity is extremely advantageous to organizations and is critical in understanding how to design their pricing strategy. Price inelasticity provides enterprises with greater price freedom because the change in demand is virtually the same whether prices grow or decrease.
Demand elasticity is a measure of how demand responds to price changes. It's normalized, which means that the specific prices and amounts are irrelevant, and everything is regarded as a percentage change. The formula for demand elasticity includes a derivative, which is why we're using it.
To know more about inelastic demand follow the link:
https://brainly.com/question/28001343
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