If demand is inelastic and the price of a product decreases by 100 percent, then
A) the change in quantity demanded is less than 100 percent.
B) the change in quantity demanded is equal to 100 percent.
C) the change in quantity demanded is greater than 100 percent.
D) the decrease in quantity demanded is greater than 0 percent.
Answer: A
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In the above figure, for a single-price monopoly the deadweight loss is equal to the area
A) abP1. B) acP2. C) bce. D) bed. E) P1beP3.
Frieda is at her local florist to buy a dozen roses. She is willing to pay $75 for the roses, and buys them for $75. Frieda's consumer surplus from the purchase is
A) $150. B) $75. C) $37.50. D) $0.
The market basket cost $300 in 2015, while it cost $250 in the base year. Therefore, the price index for 2015 is
A) 83. B) 120. C) 80. D) cannot be calculated because the inflation rate is not given.
The consumption function has two components: (1) autonomous consumption and (2)
a. fixed consumption b. consumption that varies with income c. transitory consumption d. permanent consumption e. consumption that varies with saving