If the Elasticity of Demand Is 3,and the Price Rises

question 36

Multiple Choice

If the elasticity of demand is 3,and the price rises by 15 percent,then

• A)The quantity demanded will increase by 5 percent.
• B)The quantity demanded will fall by 45 percent.
• C)The quantity demanded will rise by 4.5 percent.

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Definitions:

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Notes Payable

Short-term or long-term liabilities recorded when a business borrows money or purchases goods or services on credit with a formal written promise to pay.

Calendar-Year Company

A company that operates its fiscal year in alignment with the calendar year, beginning January 1st and ending December 31st.