A Price Elasticity of Demand for a Good or Service

question 31

Multiple Choice

A price elasticity of demand for a good or service of 1.8 tells us that:

• A) the price changes by $1.80 when quantity changes by 1 unit.
• B) quantity demanded falls by 1.8 percent when price rises by 1 percent.
• C) the price rises by 1.8 percent when quantity demanded falls by 1 percent.
• D) quantity demanded falls by 1.8 units when price changes by $1.

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Definitions:

Theory

Set of assumptions about the likely causes of abnormality and appropriate treatments.

Phenomenon

An observable fact or event, often remarkable or unusual in nature, studied in various scientific fields.

Framework

A basic structure underlying a system, concept, or text that guides its development and analysis.

Benzodiazapines

A class of drugs primarily used for treating anxiety, insomnia, and several other conditions, known for their sedative effects.