If Demand Price Elasticity Measures 2, This Implies That Consumers

question 155

Multiple Choice

If demand price elasticity measures 2, this implies that consumers would

• A) buy twice as much of the product if the price drops 10 percent.
• B) require a 2 percent drop in price to increase their purchases by 1 percent.
• C) buy 2 percent more of the product in response to a 1 percent drop in price.
• D) require at least a $2 increase in price before showing any response to the price increase.
• E) buy twice as much of the product if the price drops 1 percent.

---

Definitions:

Paper Currency

Legal tender issued by a government or central bank in the form of paper notes.

Negotiable Instrument

A signed document promising a sum of payment to a specified person or the assignee which is transferable by endorsement.

Sum Certain

A specific, agreed-upon amount of money owed under a contract that is not subject to change.

Unconditional Promise

A commitment or guarantee that is not subject to any conditions or contingencies.