A Value of the Absolute Price Elasticity of Demand Equal

Multiple Choice

A value of the absolute price elasticity of demand equal to 0.5 indicates that

A) a 5 percent increase in price leads to a 10 percent decrease in quantity demanded.
B) a 10 percent increase in price leads to a 5 percent decrease in quantity demanded.
C) a 0.5 percent increase in price leads to a 1 percent decrease in quantity demanded.
D) a 1 percent increase in price leads to a 5 percent decrease in quantity demanded.