Suppose that a 15 percent decrease in price leads to an increase in the quantity demanded of 10 percent,
A. demand is elastic.
B. demand is inelastic.
C. elasticity of demand is unitary.
D. None of the above is correct.
Answer: B
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Which of the following is a necessary condition for successful price discrimination?
A) The seller must possess market power. B) Transactions costs must be zero. C) The buyer must possess market power. D) Buyers must have identical inelastic demands.
In a market economy, resources are allocated: a. by central planners using a price system
b. by decentralized planners at the local level. c. by individual decision makers responding to market prices. d. by government bureaucracies because of the absence of a price system.
When money demand shifts, the Fed must choose between targeting the money supply and targeting the interest rate; it cannot target both
a. True b. False Indicate whether the statement is true or false
If $1 is worth .8 Canadian dollars, then 1 Canadian dollar is worth:
A. $1.80. B. $1.25. C. $0.20. D. $0.80.