A Value of the Absolute Price Elasticity of Demand Equal

question 16

Multiple Choice

A value of the absolute price elasticity of demand equal to 0.5 indicates that

• A) a 5 percent increase in price leads to a 10 percent decrease in quantity demanded.
• B) a 10 percent increase in price leads to a 5 percent decrease in quantity demanded.
• C) a 0.5 percent increase in price leads to a 1 percent decrease in quantity demanded.
• D) a 1 percent increase in price leads to a 5 percent decrease in quantity demanded.

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Definitions:

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An English psychologist and educationalist known for his work on creativity and the thought process.

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