If the Price Elasticity of Demand for Good a Is

question 48

Multiple Choice

If the price elasticity of demand for Good A is -0.2 and the price increases from $2.25 to $2.75, the percentage change in the quantity demanded of Good A is:

• A) -100%.
• B) 100%.
• C) 4.0%
• D) -4.0%.
• E) unknown because not enough information is provided.

Recognize the effects of changes in supply and demand on market equilibrium prices and quantities.

Identify and analyze the impact of external factors on supply and demand.

Calculate and interpret cross-price elasticity of demand using given data.

Distinguish between short-term and long-term price elasticities of supply.

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