Answer (B) is correct . If the elasticity coefficient is greater than 1, demand is classified as relatively elastic. Since the percentage change in quantity demanded is 10% and the price change is 5%, the elasticity coefficient is 2.0 (10% ¡Â 5%).Answer (A) is incorrect because Perfect inelasticity occurs when the coefficient is zero.
Answer (C) is incorrect because Unitary elasticity refers to a condition in which the coefficient is equal to 1.
Answer (D) is incorrect because An inelastic condition exists when the coefficient is less than 1.
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