​Figure 53

Multiple Choice

​Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market.
-Assume that the price elasticity of demand for a commodity is 0.20. A 10 percent increase in the price of the commodity 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.