Which of the Following Illustrates Elastic Demand

question 110

Multiple Choice

Which of the following illustrates elastic demand?

• A)A 10% increase in price causes a 5% decrease in quantity demanded.
• B)A 10% increase in price causes a 20% decrease in quantity demanded.
• C)a price elasticity of 0.8
• D)a price elasticity of 1.0
• E)A 10% increase in price causes a 10% reduction in quantity demanded.

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Definitions:

International Market

A broad term encompassing all commercial transactions that occur between countries, including trade, investment, and currency exchange.

Agricultural Subsidies

Financial assistance granted by the government to farmers and agribusinesses to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.

Trade Deficit

A trade deficit occurs when a country's imports of goods and services exceed its exports, leading to a negative balance of trade.

Protectionist Trade Policies

Measures implemented by a government to restrict or regulate international trade, with the aim of protecting domestic industries from foreign competition.