Let Ed_t = -0

Multiple Choice

Let Ed_t = -0.5. This implies that the demand for t is

A) Elastic, because if P_t increases by 1%, Qd_t will decrease by 0.5%
B) Elastic, because if P_t decreases by 1%, Qd_t will decrease by 0.5%
C) Inelastic, because if P_t decreases by $1, Qd_t will increase by 0.5 units
D) Inelastic, because if P_t decreases by 1%, Qd_t will increase by 0.5%