If the Price Elasticity of Demand Coefficient Equals 2 Then

question 117

Multiple Choice

If the price elasticity of demand coefficient equals 2 then:

• A) a 7 percent decrease in the price will result in a 14 percent decrease in the quantity demanded.
• B) a price decrease will increase total revenue.
• C) the good has an inelastic demand.
• D) there is likely few substitutes, a short time period under consideration, or this good accounts for a relatively small percentage of consumers' budgets.

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Definitions:

Psychodynamic

A psychological perspective that focuses on the dynamic interplay between conscious and unconscious processes in shaping personality.

Exposure Therapy

A psychological treatment method that involves confronting fears directly and in a controlled manner to reduce the fear response over time.

Dread

An intense fear or apprehension about something that is about to happen or that might happen.

Subsides

Decrease in intensity or severity; often used to describe the diminishing of symptoms or conditions over time.