The Sign of the Price Elasticity Coefficient for a Normal

question 119

Multiple Choice

The sign of the price elasticity coefficient for a normal good will:

• A) always be negative.
• B) always be positive.
• C) be positive if demand is elastic but negative if demand is inelastic.
• D) be positive if demand is inelastic but negative if demand is elastic.

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Definitions:

Expected Rate

Expected rate often refers to the return anticipated on an investment or project in the future, taking into account the risk and uncertainties associated with it.

Standard Deviation

A measure of the dispersion or variability around the mean of a set of data values, often used in finance to gauge investment risk.

Correlation Coefficient

A numerical measure ranging from -1 to 1 that represents the degree to which two variables are linearly related.

Covariance

Covariance is a measure indicating the extent to which two random variables change in tandem from their expected values.