If a 20% Price Increase Generates a 20% Decrease in Quantity

question 147

Multiple Choice

If a 20% price increase generates a 20% decrease in quantity demanded, then this is _____ response.

• A) an inelastic
• B) an elastic
• C) a unit-elastic
• D) a perfectly elastic

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Definitions:

Franchisor

An individual or company that grants the license to third parties to conduct business under its trademark, business model, and brand.

Franchise Agreement

A legal, binding contract between a franchisor and franchisee, outlining the terms and conditions for the franchise operation.

Rights

Entitlements or freedoms that are guaranteed by law, social norms, or ethical principles.

Business Organization

An entity formed for the purpose of carrying out commercial enterprise. Such organizations come in different forms including partnerships, corporations, and sole proprietorships.