Suppose We Estimate That the Demand Elasticity for Fine Leather

Multiple Choice

Suppose we estimate that the demand elasticity for fine leather jackets is -.7 at their current prices.Then we know that:

A) a 1% increase in price reduces quantity sold by .7%.
B) no one wants to buy leather jackets.
C) demand for leather jackets is elastic.
D) a cut in the prices will increase total revenue.
E) leather jackets are luxury items.