Rock melon has a price of elasticity of demand of (-)2.95, it can be concluded that the demand for rock melons is ___________.

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Question restatement: Rock melon has a price elasticity of demand of (-)2.95, it can be concluded that the demand for rock melons is ___________.

Option 1: 'relatively elastic' — This is correct in the sense that the absolute value of price elasticity of demand is 2.95, which is greater than 1. An elasticity with |Ed| > 1 means the quantity demanded responds more than proportionately to price changes, i.e., elastic demand. The negative sign indicates the inverse price-quantity relationship, but the magnitude (2.95) indicates elasticity.

Option 2: 'highly inelastic' — This is incorrect because inelastic demand would have |Ed| < 1. A value of 2.95 is far from inelastic; it shows a strong responsiveness to price.

Option 3: 'relatively inelastic' — This is also incorrect for the same reason; relative insensitivity (|Ed| < 1) does not apply when the magnitude is 2.95.

Option 4: 'perfectly elastic' — This is incorrect because perfectly elastic demand implies an infinite elasticity, meaning any price change leads to a limitless change in quantity demanded. A finite value of 2.95 does not meet that criterion.

Rock melon has a price of elasticity of demand of (-)2.95, it can be concluded that the demand for rock melons is ___________.Single choice

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