The Elasticity for a Good Is E=1

question 72

Multiple Choice

The elasticity for a good is E=1.3. What is the effect on demand of a 7% price increase?

• A)9.1% decrease
• B)9.1% increase
• C)5.4% decrease
• D)5.4% increase

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Definitions:

Technology

The application of scientific knowledge for practical purposes, especially in industry.

Forecasts

Predictions or estimates of future events, especially concerning weather or economic trends.

Renewable Resource

A natural resource that can replenish itself naturally over time, such as solar energy, wind, and forestry.

Invisible Hand

A concept introduced by Adam Smith to describe the self-regulating nature of the market through individuals' pursuit of their own interests.