Assume That the Price Elasticity of Demand Equals

Multiple Choice

Assume that the price elasticity of demand equals .2 (e_d = .2) .Given a 10 percent increase in price,there will be 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) 2 percent increase in the quantity demanded.
E) .2 percent decrease in the quantity demanded.