Suppose That the Value of the Price Elasticity of Demand

question 173

Multiple Choice

Suppose that the value of the price elasticity of demand for a product is 0.5 and its price decreases by 10%.What will happen to the quantity demanded?

• A)It will increase by 5%.
• B)It will increase by 20%.
• C)It will decrease by 5%.
• D)It will decrease by 20%.
• E)It cannot be determined without further information.

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Definitions:

Belief Perseverance

Belief perseverance is the psychological phenomenon wherein individuals maintain their beliefs despite contrary evidence.

Individualism

A theory in society that prioritizes individuals' freedom to act over the control of groups or the government.

Collectivism

A cultural orientation prioritizing the goals and well-being of the group over the individual, emphasizing interdependence, cooperation, and social harmony.

Fundamental Attribution Error

The tendency for observers to attribute other people's behavior to internal or dispositional factors and to downplay situational factors.