Suppose the value of the price elasticity of demand is -3. What does this mean?
A) A 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent.
B) A $1 increase in price causes quantity demanded to fall by 3 units.
C) A 1 percent increase in the price of the good causes quantity demanded to increase by 3 percent.
D) A 3 percent increase in the price of the good causes quantity demanded to decrease by 1 percent.
A
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What statement best describes the relationship between average monthly water bills and precipitation levels in the United States?
a. Water bills are clearly higher where precipitation is lowest b. Water bills are clearly higher where precipitation is highest c. Water bills are mostly unrelated to precipitation levels d. Water bills are linked to precipitation only in Eastern cities e. Water bills are linked to precipitation only in Western cities
In which one of the following market models is X-inefficiency most likely to be the greatest?
A. Pure competition. B. Oligopoly. C. Monopolistic competition. D. Pure monopoly.