Suppose We Find That the Price Elasticity of Demand for a Product

question 218

Multiple Choice

Suppose we find that the price elasticity of demand for a product is 3.5 when its price is increased by 2 percent. We can conclude that quantity demanded

• A)increased by 7 percent.
• B)decreased by 7 percent.
• C)decreased by 9 percent.
• D)decreased by 1.75 percent.

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Definitions:

Insight Learning

A form of cognitive learning where problem-solving occurs by means of a sudden reorganization of perceptions, leading to the solution without trial-and-error behavior.

Tolman

Edward Chace Tolman was an American psychologist who made significant contributions to the studies of learning and motivation, known for his cognitive behaviorist theory.

Relatively Permanent

Describes something that is long-lasting and stable over time, but not necessarily unchangeable.

Learning

The process of acquiring new understanding, knowledge, behaviors, skills, values, attitudes, and preferences.