Suppose You Calculate the Price Elasticity of Demand for a Certain

question 148

Multiple Choice

Suppose you calculate the price elasticity of demand for a certain good and you report that the elasticity is 0.8.The fact that the elasticity is a positive number means that

• A)when the price of the good increases, the quantity demanded increases in response.
• B)demand for the good is elastic.
• C)you have dropped the minus sign and reported the absolute value of the elasticity.
• D)the good has close substitutes and/or the good is a luxury.

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Definitions:

Weight Pounds

A measurement of weight using the pound as the unit, commonly used in the English measurement system.

Rolling Mill

A machine or factory setup for rolling metal into sheets, rods, or various shapes through compressive forces applied by rotating rolls.

Equal Leg Angles

Structural shapes whose sides form a 90-degree angle and have legs of equal length, commonly used in construction.

Unequal Leg Angles

Structural steel shapes where the two sides forming the angle are of different lengths.