If the Quantity Demanded Increases by 20 Percent in Response

question 173

Multiple Choice

If the quantity demanded increases by 20 percent in response to a 10 percent decrease in price, demand is classified as

• A) unstable.
• B) relatively inelastic.
• C) relatively elastic.
• D) of unitary elasticity.

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Definitions:

Level of Significance

The probability threshold below which the null hypothesis is rejected in hypothesis testing, typically denoted by alpha (α).

Null Hypothesis

A statement that there is no effect or no difference, and it serves as the default or starting assumption in hypothesis testing.

Variance

A measure of the dispersion of a set of data points around their mean value, quantifying how much the data points differ from each other.

Standard Deviation

A measure that quantifies the amount of variation or dispersion of a set of numeric values.