If the Absolute Value of the Price Elasticity of Demand

question 86

Multiple Choice

If the absolute value of the price elasticity of demand is 2,then a 15% increase in price causes a:

• A) 30% increase in quantity demanded
• B) 30% decrease in quantity demanded
• C) 7.5% increase in quantity demanded
• D) 7.5% decrease in quantity supplied
• E) 30% increase in income

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