If the Price Elasticity of Demand for a Product Measures

question 61

Multiple Choice

If the price elasticity of demand for a product measures 0.45,then:

• A)this good has many available substitutes.
• B)this good must be a non-essential good.
• C)this good is a high-priced good.
• D)a decrease in price will increase total revenue.
• E)this good is demand price inelastic.

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Definitions:

Correlation Coefficient

A measure that determines the degree to which two variables' movements are associated.

True Score

The true score is a theoretical concept in psychometrics representing the actual measure of the trait or characteristic being assessed, without the distortion of measurement error.

Measurement Error

The difference between the true value and the measured value due to inaccuracies or flaws in the measurement process or instrument.

Measure

To ascertain the size, amount, or degree of something using a standard unit or instrument.