If a 20% Increase in Price for a Good Results

question 297

Multiple Choice

If a 20% increase in price for a good results in a 15% decrease in quantity demanded,the price elasticity of demand is

• A)0.75.
• B)1.25.
• C)1.33.
• D)1.60.

---

Definitions:

Implied Warranty

An unwritten guarantee that the product sold meets certain criteria for usability and satisfaction.

Merchantability

A warranty, often implied by law, that goods sold are fit for the general purpose for which they are sold.

Fitness for a Particular Purpose

A legal warranty implying that a sold good is suitable for the specific use intended by the buyer, as made known to the seller at the time of purchase.

Comparative Fault

A legal doctrine that reduces the amount of damages a plaintiff can recover in a negligence-based lawsuit, based on the degree to which the plaintiff's own negligence contributed to the harm.