if a given change in price brings a proportionately larger change in quantity demanded, the

Step 1: Analyze the question The question describes a situation where a change in price causes a proportionately larger change in quantity demanded. For example, a 10% fall in price leads to a 30% rise in quantity demanded. We need to name this type of demand.

Step 2: The concept Price elasticity of demand (PED) measures how responsive quantity demanded is to a change in price:

PED = % change in quantity demanded ÷ % change in price

The three main cases are:

• Elastic demand (PED > 1): % change in quantity demanded is larger than % change in price.
• Inelastic demand (PED < 1): % change in quantity demanded is smaller than % change in price.
• Unitary elastic demand (PED = 1): both changes are equal in proportion.

Step 3: Apply to the options

• A. Relatively price elastic. The quantity change is proportionately larger than the price change, so PED > 1. This fits.
• B. Relatively price inelastic. This would need a proportionately smaller change in quantity. It does not fit.
• C. Unitary. This would need equal proportionate changes. It does not fit.
• D. Constant. This describes elasticity that stays the same along the whole demand curve, which is not what the question describes.

Step 4: Answer The correct option is A. Demand is relatively price elastic.

Exam tip: Compare the two percentages.

• Quantity change bigger than price change means elastic, with the buyer very responsive.
• Quantity change smaller than price change means inelastic, with the buyer not very responsive.

Remember "Elastic = Easily stretched": a small price change stretches quantity a lot.