Answer:
b. small percentage changes in the price will lead to much larger percentage changes in the quantity demanded.
Explanation:
Price elasticity of demand is a measure of how responsive is quantity demanded to change in price. Its formula is given by:
[tex]E_{D}[/tex] = [tex]\frac{dQ}{Q}{\frac{P}{dP} =[/tex]
= % Change in Quantity Demanded / % Change in Price
So when absolute value [tex]E_{D}[/tex] is greater than 1, a x percentage change in price will lead to larger than x percentage change in quantity demanded.
Note: Whether the percentage change in quantity demanded will be just a little or very much larger than percentage change in price will depend on how much [tex]E_{D}[/tex] is larger than 1. But b is the still the best answer among the options.
