A good has price elasticity of demand equal to 1.05. Which classification best fits the note's categories?

### Why this is right Demand is relatively elastic when the absolute responsiveness is greater than one: the percentage change in quantity demanded exceeds the percentage change in price. Since 1.05 is greater than one, it falls in this category. ### The concept The note classifies price elasticity as inelastic when it is below one, unitary when it equals one, and elastic when it exceeds one. It also describes zero elasticity and infinite elasticity as limiting cases. In standard interpretation, the own-price demand elasticity is often negative because price and quantity demanded move in opposite directions; the classification here uses its magnitude. ### The other options - **Relatively inelastic demand**: this applies when the elasticity's magnitude is below one. - **Unitary elasticity**: this applies when the magnitude equals one. - **Zero elasticity**: this means quantity demanded does not respond to price changes. ### Watch out Do not confuse a value just above one with unitary elasticity. ### Remember Above one is elastic; below one is inelastic.