If the Price of a Product Increases by 5 Percent

question 217

Multiple Choice

If the price of a product increases by 5 percent and the quantity demanded decreases by 5 percent,then the elasticity of demand is

• A) 0.
• B) 1.
• C) indeterminate.
• D) 5.
• E) 25.

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Definitions:

Stability

The state or quality of being resistant to change or fluctuation, often used to describe economic, social, or environmental conditions.

Misdirection

refers to the technique of distracting attention away from the intended focus, often used in magic tricks or in strategic communication.

Organizational Interests

The priorities or goals shared by members within an organization that guide its actions and decisions.

Hindsight Bias

The tendency to believe, after an event has occurred, that one would have predicted or expected the outcome.