If a 5 Percent Decrease in the Price of a Good

question 42

Multiple Choice

If a 5 percent decrease in the price of a good produces a 5 percent increase in the quantity demanded, the price elasticity of demand is:

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

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Definitions:

Inelastic Supply

A situation where the quantity of goods provided by producers does not significantly change in response to price fluctuations.

Demand for Wheat Bread

Refers to the quantity of wheat bread that consumers are willing to buy at different price levels, during a given period.

Price of Land

The financial value assigned to a piece of land, influenced by its location, size, and use.

Human Capital

The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or society.