Suppose the Pleasant Corporation Cuts the Price of Its American

question 179

Multiple Choice

Suppose the Pleasant Corporation cuts the price of its American Girl dolls by 10 percent, and as a result, the quantity of the dolls sold increases by 25 percent. This indicates that the price elasticity of demand for the dolls over this range is

• A) 2.5.
• B) 0.4.
• C) 0.5.
• D) 5.
• E) inelastic.

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