If the Price Elasticity of Demand for a Good Is

question 64

Multiple Choice

If the price elasticity of demand for a good is 0.2,then a 3 percent decrease in price results in a

• A)0.6 percent increase in the quantity demanded.
• B)1.5 percent increase in the quantity demanded.
• C)2 percent increase in the quantity demanded.
• D)6 percent increase in the quantity demanded.

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Definitions:

Demand Curve

A chart that represents the correlation between a product's price and the amount of that product buyers are prepared and capable of buying at different price levels.

Hamburgers

A popular fast food item consisting of a cooked patty, usually of ground beef, placed inside a sliced bun, often served with various accompaniments and condiments.

Hot Dogs

A type of food consisting of a grilled or steamed sausage served in the slit of a partially sliced bun.

Market

A venue where buyers and sellers come together to exchange goods, services, or information, either physically or virtually.