If the Price Elasticity of Demand Is 2 in Absolute

question 231

Multiple Choice

If the price elasticity of demand is 2 in absolute value, then when the price of Good X rises by 25 percent:

• A) the quantity demanded of it rises by 50 percent.
• B) the quantity demanded of it falls by 50 percent.
• C) the quantity demanded of it rises by 12.5 percent.
• D) the quantity demanded of it falls by 12.5 percent.

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