For Product X,the Price Elasticity of Demand Has an Absolute

question 61

Multiple Choice

For product X,the price elasticity of demand has an absolute value of 3.5.This means that quantity demanded will increase by

• A)1 percent for each 3.5 percent decrease in price,ceteris paribus.
• B)1 unit for each $3.50 decrease in price,ceteris paribus.
• C)3.5 percent for each 1 percent decrease in price,ceteris paribus.
• D)3.5 units for each $1 decrease in price,ceteris paribus.

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Definitions:

Power of Attorney

A formal document granting one individual the power to represent another in matters of law or finance.

Unilateral Mistake

This occurs when only one party to a contract is mistaken about a fundamental fact of the contract, which can affect the enforceability of the contract.

Implied Misrepresentation

A false statement or omission made indirectly or through implication that leads others into error.

Rescind

To retract, cancel, or annul a contract or agreement, reverting the parties to their respective positions prior to the agreement.