Which One of the Following Illustrates an Elastic Demand

question 20

Multiple Choice

Which one of the following illustrates an elastic demand?

• A)A 10 percent rise in price leads to a 5 percent decrease in quantity demanded.
• B)A 10 percent rise in price leads to a 20 percent decrease in quantity demanded.
• C)A price elasticity of demand equal to 0.2.
• D)A price elasticity of demand equal to 1.0.
• E)A price elasticity of demand equal to zero.

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Definitions:

Systematic Component

An element or part of a system that contributes to its orderly and efficient operation.

Seasonal Factor

A variable that adjusts data to account for seasonal effects, allowing for more accurate analysis by compensating for predictable fluctuations.

Multiplicative Form

A mathematical expression where quantities are multiplied together, often used in statistical models to represent relationships between variables that have an exponential or geometric effect.

Additive Form

A mathematical or modeling technique where components are added together to form a total, often used in calculations of sums, totals, or composite measurements.