A Price elasticity of 0.4 means that there is inelastic demand, meaning the percentage change in quantity demanded will be less than the percentage change in price.
Price elasticity shows how much the quantity that is demanded of a good will change as a result of prices changing.
When the Price elasticity is less than 1, as is the case here, it means that for every 1% change in price, there is a 0.4% change in quantity demanded. This means that demand is inelastic as it does not change significantly as a result of a price change.
Examples of such goods include:
In conclusion, a price elasticity of 0.4 means that a good is inelastic because the quantity demanded of it does not change significantly in response to a price change.
Find out more at https://brainly.com/question/12396600.
