If the Price Elasticity of Demand for a Good Is

question 9

Multiple Choice

If the price elasticity of demand for a good is 0.5,then a 5 percent increase in price results in a

• A)0.1 percent decrease in the quantity demanded.
• B)1 percent decrease in the quantity demanded.
• C)2.5 percent decrease in the quantity demanded.
• D)10 percent decrease in the quantity demanded.

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Definitions:

Assets and Liabilities

The resources owned by a company (assets) that provide future economic benefits and the obligations (liabilities) it owes to other entities.

Temporary Investments

Investments not intended to be held for long periods, often used to earn a return on idle cash.

Primary Objective

The main goal or purpose that an organization or individual aims to achieve.

Market Price

The actual selling price of goods or services in the market, which may fluctuate based on demand and supply.