If the Price Elasticity of Demand for a Good Is

question 9

Multiple Choice

If the price elasticity of demand for a good is 0.5,then a 5 percent increase in price results in a

• A)0.1 percent decrease in the quantity demanded.
• B)1 percent decrease in the quantity demanded.
• C)2.5 percent decrease in the quantity demanded.
• D)10 percent decrease in the quantity demanded.

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Definitions:

Supply Chain Cost

All expenses incurred in the production, handling, and distribution of a product or service, from raw materials to delivery to the end user.

Responsiveness

The ability of a company, organization, or system to quickly and effectively react to changes, inquiries, or demands.

Total Demand

The entire quantity of a product or service that consumers in a market are willing and able to buy over a specified time period, given all other factors being constant.

Market Share

The portion of a market controlled by a particular company or product, usually expressed as a percentage of total sales in that market.