If the price elasticity of demand for a good is 2.0, then a 10 percent increase in price results in a
a. 0.2 percent decrease in the quantity demanded.
b. 5 percent decrease in the quantity demanded.
c. 20 percent decrease in the quantity demanded.
d. 40 percent decrease in the quantity demanded.
c
Economics
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A 10 percent decrease in income decreases the quantity demanded of pizza by 3 percent. The income elasticity of demand for pizza is
A) -0.3. B) 0.3. C) 3.3. D) 10.0.
Economics
Suppose that firm A obtained a patent for a new medication that cures certain types of cancer. Which assumption of the supply-and-demand model does not hold in this example?
A) Everyone is a price taker. B) Products are homogeneous. C) Trading costs are low. D) Everyone has full information about the price and quality of goods.
Economics