Scenario 5.1 The Demand for Noodles Is Given by the Following Equation

Multiple Choice

Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P_x. Assume that P = $8, I = 200, and P_x = $10.
-When the supply elasticity of a product is 2.5, a 10 percent decrease in price will _____ the quantity supplied of the product by _____ percent.

A) increase; 25
B) decrease; 25
C) increase; 2.5
D) decrease; 2.5
E) decrease; 4