What Is the Effect of a 10 Percent Price Increase

question 79

Multiple Choice

What is the effect of a 10 percent price increase on quantity demanded if elasticity is infinite?

• 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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Definitions:

Warranty Liability

Liability that is attributed when the transfer of an instrument breaches a warranty associated with an instrument.

Transfer

The act of moving or conveying property or rights from one party to another.

Primary Liability

The obligation falls directly on the individual or entity primarily responsible for an obligation, especially in financial transactions.

Principal's Name

The name of the main party or entity involved in a financial or legal transaction.