Elasticity is a term in economics which refers to the proportional change in two variables related to each other. For example, if you earn $80,000 a year and use cable TV service that costs you $100 per year, your demand for the cable service is likely to be what?
- Inelastic
- Perfectly inelastic
- Elastic
- Perfectly elastic
Answer
The correct answer is A) Inelastic.
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