If the Price Elasticity of Demand Coefficient for Herbal Tea

question 56

Multiple Choice

If the price elasticity of demand coefficient for herbal tea is estimated to be 0.5, what would a 10 percent decrease in price likely lead to?

• A) a 10 percent decrease in the quantity of herbal tea demanded
• B) a 5 percent decrease in the quantity of herbal tea demanded
• C) a 10 percent increase in the quantity of herbal tea demanded
• D) a 5 percent increase in the quantity of herbal tea demanded

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