When the demand for a product is inelastic, it means that the quantity demanded changes less than the percentage change in price. In other words, consumers are not as responsive to price changes for inelastic goods. In this situation, even if the price of the product decreases significantly, the quantity demanded will not increase proportionally.
Let's break down the question:
- There is a 14 percent decrease in the price of product X.
- We need to determine how this change affects the quantity demanded for an inelastic demand.
In elastic demand scenarios:
1. If the price decreases, the quantity demanded typically increases.
2. In the case of inelastic demand, the increase in the quantity demanded will be less than the percentage decrease in price.
Given the 14 percent decrease in price and considering the demand is inelastic, the appropriate conclusion is that the quantity of X demanded will increase, but by less than 14 percent.
Therefore, the correct answer is:
increase the quantity of X demanded by less than 14 percent.
