Suppose That the Elasticity of Demand for a Product Is

question 63

Multiple Choice

Suppose that the elasticity of demand for a product is 4.0 and quantity demanded increases by 20%. What must the percentage decrease in price have been?

• A) 5%
• B) 20%
• C) 80%
• D) 200%

---

Definitions:

Health Insurance

A type of insurance coverage that pays for medical and surgical expenses incurred by the insured, and may also cover regular medical services or long-term nursing care needs.

Pre-Contribution Gain

The increase in value of an asset or investment before it is contributed to a retirement plan or investment account.

Appreciated Property

Property that has increased in value over time, which can impact capital gains tax when sold.

Partnership Interest

An ownership share in a partnership that represents the holder's stake in the partnership's profits, losses, and capital.