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Indy Has a Price Elasticity of Demand for Beer of 1.00.Suppose

Question 3

Multiple Choice

Indy has a price elasticity of demand for beer of 1.00.Suppose the price of each beer is increased by 10 percent.What will happen to the total amount Indy spends on beer?


A) It will not change.
B) It will decrease 10 percent.
C) It will increase 10 percent.
D) It is impossible to tell.

Correct Answer:

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