If a 5 Percent Reduction in the Price of a Commodity

question 30

Multiple Choice

If a 5 percent reduction in the price of a commodity results in a 3 percent increase in the quantity demanded, demand is said to be

• A)perfectly elastic.
• B)elastic.
• C)unit elastic.
• D)inelastic.
• E)perfectly inelastic.

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Definitions:

Quart

A unit of liquid volume equivalent to a quarter of a gallon, or approximately 0.946 liters.

Abbreviation

A shortened form of a word or phrase used to save space or time in written communication.

Numerator

The top number in a fraction that indicates how many parts of a whole are being considered.

Kilo-

A prefix in the metric system denoting a factor of one thousand.