Assume That the Price Elasticity of Demand for a Commodity

Multiple Choice

Assume that the price elasticity of demand for a commodity is 0.20.A 10 percent increase in price will be followed by a:

A) 20 percent increase in the quantity demanded.
B) 2 percent decrease in the quantity demanded.
C) 20 percent decrease in the quantity demanded.
D) 0.2 percent decrease in the quantity demanded.
E) 2 percent increase in the quantity demanded.