Answer: b. Elastic
Explanation:
The price Elasticity of a good shows how sensitive it is to a change in price.
It can be calculated thus,
Price elasticity of demand = %change in quantity/%change in price
Plugging in figures we have,
Price elasticity of demand = -27% (because it is a drop so negative)/ 24%
= -1.125
When the Price Elasticity is above 1 then we say the good is ELASTIC meaning that a 1% increase in price causes more than a 1% decrease in Quantity Demanded.
