Suppose the Price Elasticity of Demand for Good X Is

question 20

Multiple Choice

Suppose the price elasticity of demand for good X is 1.5.If household income increases by 25%,ceteris paribus,what is the change in quantity demanded for good X?

• A)a 37.5% increase in quantity demanded
• B)a 3.75% increase in quantity demanded
• C)a 0.375% increase in quantity demanded
• D)no change in quantity demanded
• E)There is not enough information to answer this question.

---

Definitions:

Commercialization

The process of bringing new products or services to market, including production, distribution, marketing, and sales strategies.

Efficiency-Enhancing Innovations

Changes to existing products or ideas that make them lower cost.

Market-Creating Innovations

Innovations that generate new markets by fulfilling unmet needs or creating new categories of products or services.

New Class of Consumers

Emerging segments of the market population with distinct characteristics, behavior patterns, or purchasing preferences not previously accounted for.