Multiple Choice
The price elasticity of demand for gourmet coffee is estimated to be equal to 1.6. It is expected, therefore, that a 5 percent increase in price would lead to a:
A) 16 percent decrease in the quantity of gourmet coffee demanded.
B) 16 percent increase in the quantity of gourmet coffee demanded.
C) 8 percent decrease in the quantity of gourmet coffee demanded.
D) 8 percent increase in the quantity of gourmet coffee demanded.
E) 10 percent increase in the quantity of gourmet coffee demanded.
Correct Answer:
Verified
Correct Answer:
Verified
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