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Microeconomics 15th Edition by James Gwartney,Richard Stroup,Russell Sobel,David Macpherson
Edition 15ISBN: 978-1285453569Microeconomics 15th Edition by James Gwartney,Richard Stroup,Russell Sobel,David Macpherson
Edition 15ISBN: 978-1285453569 Exercise 10
* Are the following statements true or false Explain your answers.
a. A 10 percent reduction in price that leads to a 15 percent increase in the amount purchased indicates a price elasticity of more than 1.
b. A 10 percent reduction in price that leads to a 2 percent increase in total expenditures indicates a price elasticity of more than 1.
c. If the percentage change in price is less than the resultant percentage change in quantity demanded, demand is elastic.
a. A 10 percent reduction in price that leads to a 15 percent increase in the amount purchased indicates a price elasticity of more than 1.
b. A 10 percent reduction in price that leads to a 2 percent increase in total expenditures indicates a price elasticity of more than 1.
c. If the percentage change in price is less than the resultant percentage change in quantity demanded, demand is elastic.
Explanation
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a) As per the total outlay method of mea...
Microeconomics 15th Edition by James Gwartney,Richard Stroup,Russell Sobel,David Macpherson
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