If the Absolute Price Elasticity of Demand for Good Y

question 270

Multiple Choice

If the absolute price elasticity of demand for good Y is 0.75, when there is a 30 percent increase in price, we can conclude that quantity demanded

• A) has fallen by 35.0 percent.
• B) has fallen by 10.4 percent.
• C) has fallen by 22.5 percent.
• D) has fallen by 40.0 percent.

---

Definitions:

Internet Markets

Markets that operate online, enabling buyers and sellers to transact over the internet, which often leads to reduced costs and wider geographical reach.

Network Effects

The effect that additional users of a good or service have on the value of that product to others, typically increasing the value with more users.

Natural Monopoly

A market structure where a single firm can provide a good or service at a lower cost than any potential competitors, usually due to economies of scale.

Standard Product

A product that is uniform in quality and specifications, produced in large quantities, and often interchangeable with similar products from other manufacturers.