Assume That the Price Elasticity of Demand Equals 0

Multiple Choice

Assume that the price elasticity of demand equals 0.4 (e_d = 0.4) . Given a 10 percent increase in price, there will be a

A) 40 percent increase in the quantity demanded.
B) 4 percent decrease in the quantity demanded.
C) 40 percent decrease in the quantity demanded.
D) 4 percent increase in the quantity demanded.
E) 2.5 percent decrease in the quantity demanded.