If the price elasticity of demand for a good is 0.25, then a 20 percent decrease in price results in a
a. 0.0625 percent increase in the quantity demanded.
b. 4 percent increase in the quantity demanded
c. 5 percent increase in the quantity demanded.
d. 80 percent increase in the quantity demanded.
c
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Refer to the scenario above. In this case, the employer may prevent shirking by ________
A) paying an efficiency wage to each worker B) paying a wage less than minimum wage C) reducing the nominal wage paid to workers D) reducing the real wage paid to workers
Suppose an import-competing firm is imperfectly competitive. Replacement of an export tariff with an import quota that yields the same level of imports will ________ market price, ________ producer surplus, ________ consumer surplus, ________
government revenue, and ________ overall domestic national welfare. A) increase; increase; decrease; decrease; decrease B) have no effect on; have no effect on; have no effect on; decrease; decrease C) increase; have no effect on; decrease; decrease; increase D) increase; increase; increase; decrease; have an ambiguous effect on E) decrease; decrease; increase; decrease; increase