If the Price Elasticity of Demand for Good a Is

question 48

Multiple Choice

If the price elasticity of demand for Good A is -0.2 and the price increases from $2.25 to $2.75, the percentage change in the quantity demanded of Good A is:

• A) -100%.
• B) 100%.
• C) 4.0%
• D) -4.0%.
• E) unknown because not enough information is provided.

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Definitions:

Maximax Strategy

A decision-making approach focused on maximizing the maximum possible payoff, suitable for optimistic decision-makers.

Maximin Criterion

A decision rule used in statistics, economics, and game theory that selects the action which has the highest minimum payoff.

States of Nature

Possible outcomes or situations in decision-making under uncertainty that affect the results of different decisions but are beyond the control of the decision-maker.

Manufacturing Alternatives

Different methods or approaches available for the production of goods, considering factors like cost, technology, and resource availability.