A good has a price elasticity of demand of 2.5 this tells us that; A. none of the above B. the price rises by 2.5% when quantity demanded falls by 1% C. Quantity demanded decreases by 2.5% when the price rises by 1% D. the price changes by $ 2.50 when quantity changes by 1 unit

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 2CQQ: The price of a good rises from 8 to 12, and the quantity demanded falls from 110 to 90 units....
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  1. A good has a price elasticity of demand of 2.5  this tells us that; 

      A.

    none of the above

      B.

    the price rises by 2.5% when quantity demanded falls by 1%

      C.

    Quantity demanded decreases by 2.5% when the price rises by 1%

      D.

    the price changes by $ 2.50 when quantity changes by 1 unit

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