The Value of the Absolute Price Elasticity of Demand for Good

question 179

Multiple Choice

The value of the absolute price elasticity of demand for good A is 4. The absolute price elasticity for good B is 1. Which good's quantity demanded is more responsive to a change in price?

• A) Good A
• B) Good B
• C) They are equally responsive.
• D) Not enough information is given.

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Definitions:

E-Commerce

Electronic commerce, or e-commerce, encompasses the buying and selling of goods and services using the internet and other electronic systems.

Discount Stores

Retail outlets that sell products at lower prices than traditional department stores or retailers, typically by offering goods that are off-brand or in some way discounted.

Frictionally Unemployed

Individuals temporarily out of work while moving between jobs or looking for their first jobs.

Unemployment Rate

An indicator of the proportion of people in the workforce who are unemployed and searching for work.