What Would Be the Consequences of a 10 Percent Decrease

question 64

Multiple Choice

What would be the consequences of a 10 percent decrease in the price of a good for which price elasticity of demand is 5?

• A)A 50 percent decrease in quantity demanded
• B)A 5 percent increase in quantity demanded
• C)A 50 percent increase in quantity demanded
• D)A decrease in quantity demanded by 0.2
• E)An increase in quantity demanded by 0.2

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Definitions:

Calendar Year

A one-year period that begins on January 1 and ends on December 31, used for general purposes including statutory reporting and personal timekeeping.

Sales Estimate

An approximate calculation or judgment of the amount of sales a company expects to achieve in a specific period.

Net Working Capital

A measure of a company's liquidity, operational efficiency, and short-term financial health, calculated as current assets minus current liabilities.

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its current assets.