If the absolute price elasticity of demand is 2.5, a 10 percent increase in the price will cause
A) the quantity demanded to decrease by 2.5 percent.
B) the quantity demanded to decrease by 25 percent.
C) the quantity demanded to decrease by 4 percent.
D) the quantity demanded to decrease by 40 percent.
Answer: B
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Which of the following actions does not promote capital deepening?
(A) Raising taxes to pay for building roads. (B) A low population growth rate at the same time that capital stock expands. (C) Borrowing money from foreign nations to invest in building infrastructure in this country. (D) Saving less and spending more of one's disposable income.
When the government redistributes income from the wealthy to the poor,
a. efficiency is improved, but equality is not. b. both wealthy people and poor people benefit directly. c. people work less and produce fewer goods and services. d. the government collects more revenue in total.