The Price Elasticity of Demand Coefficient for Gourmet Coffee Is

question 185

Multiple Choice

The price elasticity of demand coefficient for gourmet coffee is estimated to be equal to 1.6. It is expected, therefore, that a 10% increase in price would lead to:

• A)​a 16% decrease in the quantity of gourmet coffee demanded.
• B)​a 16% increase in the quantity of gourmet coffee demanded.
• C)​an 8% decrease in the quantity of gourmet coffee demanded.
• D)​an 8% increase in the quantity of gourmet coffee demanded.

---

Definitions:

Drive

An internal motivational state created by physiological or psychological needs that drives an organism to fulfill those needs.

Homeostasis

The ability of an organism or environment to maintain stability in response to changes.

Intrinsic Motives

Internal drives for behavior that come from personal satisfaction or the joy of doing a task, rather than external rewards.

Drive Level

The intensity of an urge or motivation that propels an individual towards a certain behavior to satisfy a need or achieve a goal.