If the elasticity of demand for tongue depressors is 0.5,
A)a 10% rise in the price of tongue depressors will lower quantity demanded by 50%.
B)an increase in the price of tongue depressors will lower total revenue for sellers.
C)a 10% increase in the price of tongue depressors will not change its total revenue.
D)a 10% fall in the price of tongue depressors will raise quantity demanded by 5%.

Question

Quizplus · Accepted Answer

The elasticity of demand measures how much the quantity demanded of a good responds to a change in the price of that good. With an elasticity of 0.5, a 10% fall in price leads to a 5% increase in quantity demanded (0.5 * 10% = 5%).

If the Elasticity of Demand for Tongue Depressors Is 0