Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market.
-What would be the consequence of a 10 percent decrease in the price of a good for which price elasticity of demand is 5?
A)A 50 percent decrease in the quantity demanded
B)A 5 percent increase in the quantity demanded
C)A 50 percent increase in the quantity demanded
D)A decrease in the quantity demanded by 0.2 units
E)An increase in the quantity demanded by 0.2 units

Question

​Figure 5.3. The figure shows the wage rate and the quantity of labor supplied in an unskilled labor market. 
-What would be the consequence of a 10 percent decrease in the price of a good for which price elasticity of demand is 5?
A)A 50 percent decrease in the quantity demanded 
B)A 5 percent increase in the quantity demanded 
C)A 50 percent increase in the quantity demanded 
D)A decrease in the quantity demanded by 0.2 units 
E)An increase in the quantity demanded by 0.2 units

Quizplus · Accepted Answer

The Answer is C

​Figure 53

Figure 53