If the Price of Textbooks Increases by One Percent and the Quantity

question 101

Multiple Choice

If the price of textbooks increases by one percent and the quantity demanded falls by one-half percent, then the price elasticity of demand is equal to:

• A)0.05.
• B)0.5.
• C)2.
• D)5.

---

Definitions:

Purchasing Power

The ability of an individual or group to buy goods and services, often related to their income and the price level of goods.

Sociocultural

Relating to or involving the social aspects and cultural dimensions of society and their impact on human behavior and interactions.

Demographics

The characteristics of human populations that can be used to identify consumer markets.

Discretionary Income

The amount of an individual's income that is left for spending, investing, or saving after taxes and personal necessities (like food and shelter) have been paid.