If a 1% Change in Price Leads to a 2

question 230

Multiple Choice

If a 1% change in price leads to a 2% change in quantity demanded,then the elasticity of demand is

• A)0.5.
• B)1.0.
• C)1.5.
• D)2.0.

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Definitions:

Interest

The cost of borrowing money or the payment made to a lender by a borrower for the use of money, typically expressed as an annual percentage rate.

Credit Card

A payment card issued to users as a method of payment allowing the cardholder to pay for goods and services based on the holder's promise to pay for them at a later date.

Effective Annual Rate

The interest rate on a loan or financial product restated from the nominal rate as an annual rate, reflecting the effects of compounding.

Compounded Monthly

The process of adding interest to a principal sum of money, with the interest that is added also earning interest, occurring on a monthly basis.