Multiple Choice
The price of a good rises by 12 percent and the price elasticity of demand for the good is 0.85. Which of the following is a correct interpretation of these facts?
A) When the price rises by 12 percent, the quantity demanded decreased by 0.85 percent.
B) For each 1 percent that the price rose, the quantity demanded decreased by 10.2 percent.
C) For each 0.85 percent that the price rose, the quantity demanded decreased by 1 percent.
D) For each 1 percent that the price rose, the quantity demanded decreased by 0.85 percent.
Correct Answer:
Verified
Correct Answer:
Verified
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