Suppose that the price elasticity of demand is -0.80 for aspirin. We could then say:

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The problem states that the price elasticity of demand for aspirin is -0.80, and asks what we could say about this.
Option a: 'the demand for aspirin is relatively inelastic.' The absolute value of elasticity is | -0.80 | = 0.80, which is less than 1, indicating inelastic demand. Consumers respond less than proportionately to price changes, so this characterization is accurate.
Option b: 'the demand for aspirin is relatively elastic.' Elastic demand would have an absolute elasticity greater than 1. Since 0.80 < 1, this claim is incorrect.
Option c: 'we are unable to be determined with the provided information.' The information given (the elasticity value of -0.80) is sufficient to classify elasticity as inelastic, so claiming insufficient information is not true.
Option d: 'the demand for aspirin is unitary elastic.' Unitary elasticity occurs when the absolute value equals 1. Here | -0.80 | ≠ 1, so this statement is false.

MCD2020 - T1 - 2025 Tutorial Quiz 3 - Elasticity and its applications

Suppose that the price elasticity of demand is -0.80 for aspirin. We could then say:

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