An Absolute Price Elasticity of Demand Equal to 0

Multiple Choice

An absolute price elasticity of demand equal to 0.4 indicates that a

A) 4 percent increase in price leads to a 10 percent decrease in quantity demanded.
B) 1 percent increase in price leads to a 4 percent decrease in quantity demanded.
C) 0.4 percent decrease in price leads to a 1 percent increase in quantity demanded.
D) 10 percent decrease in price leads to a 4 percent increase in quantity demanded.