If the Value of the Price Elasticity of Demand Is

question 27

Multiple Choice

If the value of the price elasticity of demand is 0.2, this means that:

• A) a 20 percent decrease in price causes a 1 percent increase in quantity demanded.
• B) a 0.2 percent decrease in price causes a 1 percent increase in quantity demanded.
• C) a 5 percent decrease in price causes a 1 percent increase in quantity demanded.
• D) a 0.2 percent decrease in price causes a 0.2 percent increase in quantity demanded.

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Definitions:

Reliable

A term indicating the consistency or repeatability of a measure or test over time.

Test Outcome

The result or conclusion derived from conducting a test, which could be quantitative or qualitative, based on the objectives and methodology of the test.

Hypothesis

An educated guess formed on the grounds of restricted data, designed to facilitate more in-depth inquiry.

Dependent Variable

The variable in an experiment that is expected to change as a result of manipulations of the independent variable.