Table 52 -If the Price Elasticity of Demand Is ?0

question 71

Multiple Choice

Table 5.2
$\begin{array}{c}\begin{array}{lll}\\ \text {Old}\\ \text {New}\end{array}\begin{array}{lll}\text {Quantity}\\\hline 20\\10\end{array}\begin{array}{lll}\text{ Price}\\\hline \$ 40 \\ \$ 60 \end{array}\end{array}$


-If the price elasticity of demand is ?0.5,then a _____

• A)1 percent decrease in quantity demanded leads to a 0.5 percent decrease in price.
• B)1 percent decrease in price leads to a 0.5 percent increase in quantity demanded.
• C)50 percent decrease in price leads to a 1 percent increase in quantity demanded.
• D)50 percent decrease in price leads to a 100 percent increase in quantity demanded.
• E)50 percent decrease in quantity demanded leads to a 1 percent decrease in price.

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