Assume the Demand for Electricity, a Necessity with Few Substitutes

question 2

Multiple Choice

Assume the demand for electricity, a necessity with few substitutes, is −0.2. If the electric company raised its rates by 10 percent, we would expect a

• A) 10 percent decrease in quantity demanded.
• B) 2 percent increase in quantity demanded.
• C) 10 percent increase in quantity demanded.
• D) 2 percent decrease in quantity demanded.
• E) 5 percent decrease in quantity demanded.

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