If the Price Elasticity of Demand Is 0

question 24

Multiple Choice

If the price elasticity of demand is 0.5,then a 10% increase in price results in a

• A)50% reduction in quantity demanded.
• B)5% increase in quantity demanded.
• C)5% decrease in total revenues.
• D)5% decrease in quantity demanded.
• E)0.5% decrease in quantity demanded.

---

Definitions:

Allocate

To allocate means to distribute resources or duties for a specific purpose or to particular entities.

Distribute

To share or spread something, especially resources or goods, among a group of people or over an area.

Apply

To make use of or put into effect; in accounting, it may refer to applying principles or policies.

Market Value

The current price at which an asset or service can be bought or sold in an open market.