If a 2 Percent Decrease in the Price of a Good

question 47

Multiple Choice

If a 2 percent decrease in the price of a good leads to a 6 percent increase in the quantity demanded, the price elasticity of demand for the good equals ________.

• A)2.0
• B)3.0
• C)6.0
• D)0.33

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Definitions:

Trend Percentage

An analysis tool used to evaluate the systematic increase or decrease in financial statement items over different periods.

Horizontal Analysis

A financial analysis technique that compares historical financial information over a series of reporting periods to identify trends and growth patterns.

Income Statement

A financial document that reports a company's financial performance over a specific accounting period, detailing revenues and expenses to show net income or loss.

Net Income

The total earnings of a company after deducting all expenses, taxes, and losses from total revenue.