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:

Exact Interest

Interest calculation method based on a 365-day year or actual number of days in a loan period.

365-Day Year

A method of computing interest where the basis for the calculation is a full 365-day year, used to give a more precise daily rate.

360-Day Year

An accounting practice assuming twelve 30-day months, used for simplicity in calculations and financial models.

Exact Simple Interest

Interest calculated based on the principal amount for a specific number of days, using a 365-day year.