What Is the Effect of a 10 Percent Price Increase

question 178

Multiple Choice

What is the effect of a 10 percent price increase on quantity demanded if elasticity is larger than zero but less than 1?

• A)Quantity demanded does not change.
• B)Quantity demanded drops by less than 10 percent.
• C)Quantity demanded drops by 10 percent.
• D)Quantity demanded drops by more than 10 percent.
• E)Quantity demanded drops to 0.

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