Suppose the Value of the Price Elasticity of Demand Is

question 171

Multiple Choice

Suppose the value of the price elasticity of demand is -3.What does this mean?

• A)A 1 percent increase in the price of the good causes quantity demanded to increase by 3 percent.
• B)A 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent.
• C)A 3 percent increase in the price of the good causes quantity demanded to decrease by 1 percent.
• D)A $1 increase in price causes quantity demanded to fall by 3 units.

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