Economists Estimated That the Price Elasticity of Beer Is -0

question 198

Multiple Choice

Economists estimated that the price elasticity of beer is -0.30 and the income elasticity of beer is 0.09. This means that

• A) an increase in the price of beer will increase the quantity demanded of beer and beer is a normal good.
• B) an increase in the price of beer will lead to an increase in revenue for beer sellers and beer is a normal good.
• C) a decrease in the price of beer will lead to an increase in revenue for beer sellers and beer is an inferior good.
• D) an increase in the price of beer will lead to a decrease in the quantity demanded of beer and beer is a necessity.