If the Price of a Cup of Coffee Increases by 50

question 121

Multiple Choice

If the price of a cup of coffee increases by 50 percent,the quantity demanded decreases by 50 percent.The price elasticity of demand is:

• A) elastic.
• B) inelastic.
• C) unit elastic.
• D) zero.

---

Definitions:

Good X

A placeholder term often used in economics to represent a generic good or product in theoretical models and discussions.

Good Y

A generic term used in economic models to represent a specific type of product or commodity.

Consumer Price Index

An index that measures changes in the price level of a market basket of consumer goods and services purchased by households, indicative of inflation or deflation.

Quantity Theory

An economic theory that suggests that the amount of money in circulation directly impacts the level of economic activity and the price levels.