Assume That the Price Elasticity of Demand Equals

question 54

Multiple Choice

Assume that the price elasticity of demand equals .2 (e_d = .2) .Given a 10 percent increase in price,there will be a

• A)20 percent increase in the quantity demanded.
• B)2 percent decrease in the quantity demanded.
• C)20 percent decrease in the quantity demanded.
• D)2 percent increase in the quantity demanded.
• E).2 percent decrease in the quantity demanded.

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