A Price Elasticity of Demand of 2 Means That a 10

question 170

Multiple Choice

A price elasticity of demand of 2 means that a 10 percent increase in price will result in a

• A)2 percent decrease in quantity demanded.
• B)20 percent decrease in quantity demanded.
• C)5 percent decrease in quantity demanded.
• D)2 percent increase in quantity demanded.
• E)20 percent increase in quantity demanded.

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Definitions:

Criteria

Standards or benchmarks used to evaluate or make decisions about something.

Postpurchase Behavior

The actions and reactions of consumers after buying and using a product, including levels of satisfaction, repeat purchases, and feedback or complaints.

Consumer Purchase Decision

The process by which individuals decide whether, what, when, from whom, and how much to buy a product or service.

Alternative Evaluation

The process consumers undertake to assess the benefits and drawbacks of different options before making a purchase decision.