Suppose 200 DVDs are rented when the price is $4. If the price drops by $.80, the number of DVDs rented increases to 220. Which of the following statements about the price elasticity of demand is true?
A) The elasticity of demand is equal to 5.
B) Demand is elastic.
C) Demand is inelastic.
D) Demand is unit elastic.
E) The elasticity of demand is equal to 2.
Correct Answer:
Verified
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Q11: A product with an elastic demand means
Q12: Elasticity is a measure of
A) how quickly
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Q14: To sell one more unit of output,
Q16: Demand provides a great deal of information
Q17: Price elasticity of demand is measured by
Q18: Price elasticity of demand is a measure
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A) that income
Q20: Marginal revenue is
A) the price at which
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