If the coefficient of price elasticity of demand is 0.1, demand is?

A. elastic
B. inelastic
C. zero elastic
D. unitary elastic

Correct Answer: Option B

B. inelastic

Explanation

The numerical values for the PED coefficient could range from zero to infinity. In general, the demand for a good is said to be inelastic (or relatively inelastic) when the PED is less than one (in absolute value): that is, changes in price have a less than the proportional effect on the quantity of the good demanded.