Assume That the Price Elasticity of Demand for a Commodity

question 34

Multiple Choice

Assume that the price elasticity of demand for a commodity is 0.20.A 10 percent increase in price will be followed by a:

• A)20 percent increase in the quantity demanded.
• B)2 percent decrease in the quantity demanded.
• C)20 percent decrease in the quantity demanded.
• D)0.2 percent decrease in the quantity demanded.
• E)2 percent increase in the quantity demanded.

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