If the Price Elasticity of Demand Coefficient for Gourmet Coffee

question 28

Multiple Choice

If the price elasticity of demand coefficient for gourmet coffee is estimated to be 1.6, what would a 5 percent increase in price likely lead to?

• A) an 8 percent increase in the quantity of gourmet coffee demanded
• B) a 16 percent increase in the quantity of gourmet coffee demanded
• C) a 16 percent decrease in the quantity of gourmet coffee demanded
• D) an 8 percent decrease in the quantity of gourmet coffee demanded

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