If the Price Elasticity of Demand for a Good Is

question 10

Multiple Choice

If the price elasticity of demand for a good is 4.0,then a 10 percent increase in price results in a

• A) 0.4 percent decrease in the quantity demanded.
• B) 2.5 percent decrease in the quantity demanded.
• C) 4 percent decrease in the quantity demanded.
• D) 40 percent decrease in the quantity demanded.

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Definitions:

Input Price

The cost associated with purchasing the raw materials or components required for production.

Marginal Product

The additional output that is produced by using one more unit of a factor, keeping all other factors constant.

Worker Productivity

The amount of goods and services that a worker produces in a given period of time.

College Education

A postsecondary education program that leads to an academic degree or professional qualification, typically offered by colleges and universities.