The Price Elasticity of Demand for a Product Is 2

question 5

Multiple Choice

The price elasticity of demand for a product is 2, which implies that

• A) if the price increases by 1 percent, the quantity demanded will decrease by 2 percent.
• B) if the price increases by 1 unit, the quantity demanded will decrease by 2 units.
• C) if the price increases by 1 percent, the quantity demanded will increase by 1 percent.
• D) if the quantity demanded increases by 1 percent, the price will decrease by 2 percent.
• E) the change in quantity demanded divided by the change in price is equal to 2.

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