If as a Result of a 5 Per Cent Rise

question 13

Multiple Choice

If as a result of a 5 per cent rise in price demand falls by 10 per cent, which of the following statements is correct? Please select all that apply.

• A) The price elasticity of demand is elastic
• B) The price elasticity of demand is −2
• C) The revenue for the firm will fall
• D) It is likely that the firm is operating in an uncompetitive market

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Definitions:

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of all final goods and services produced within a country's borders in a specific time period, expressed in base-year prices.

Growth Rate

The rate at which a company's sales or revenues increase over a specified time period.

Catch-Up Growth

The process by which a country or economy grows rapidly in order to close the gap with more developed economies.

GDP Per Person

A measure of a country's economic output that accounts for its population, calculated by dividing the GDP by the total population.