If the Price Elasticity of Demand for a Good Is

question 52

Multiple Choice

If the price elasticity of demand for a good is -0.8 and quantity demanded decreases by 40%, price must have

• A) increased by 5%.
• B) increased by 32%.
• C) decreased by 20%.
• D) decreased by 32%.
• E) none of the above

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Definitions:

Resource Demand

The desire and ability of firms to acquire economic resources or inputs like labor, technology, and raw materials, influenced by the price of these resources and the level of economic output.

Population Growth

The increase in the number of individuals in a population, usually expressed as a percentage of the total population per year.

Consumption Per Person

A measure of the average amount of goods and services consumed by each person within a specific population.

World Commodity Prices

The prices at which basic products, which are traded globally, are sold and bought in the international markets.