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Chuck Has a Price Elasticity of Demand for Beer of 1.2

Question 119

Multiple Choice

Chuck has a price elasticity of demand for beer of 1.2. Suppose that the price of beer is increased by 10 percent. What will happen to the total amount Chuck spends on beer?


A) It will not change.
B) It will decrease.
C) It will increase.
D) It is impossible to tell.

Correct Answer:

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