Graph 5-2 -If There Is a 10 Per Cent Increase in the Cent

Multiple Choice

Graph 5-2

-If there is a 10 per cent increase in the price of a good and this leads to a four per cent decrease in the quantity demanded then the price elasticity is:

A) 2.5 and elastic
B) 2.5 and inelastic
C) 0.4 and elastic
D) 0.4 and inelastic