​Figure 53

Multiple Choice

​Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market.
-What would be the consequence of a 10 percent decrease in the price of a good for which price elasticity of demand is 5?

A) A 50 percent decrease in the quantity demanded
B) A 5 percent increase in the quantity demanded
C) A 50 percent increase in the quantity demanded
D) A decrease in the quantity demanded by 0.2 units
E) An increase in the quantity demanded by 0.2 units