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For Product XYZ, the Price Elasticity of Demand Has an Absolute

Question 1

Multiple Choice

For product XYZ, the price elasticity of demand has an absolute value of 3.5.This means that quantity demanded will increase by


A) 1 percent for each 3.5 percent decrease in price, ceteris paribus.
B) 1 unit for each $3.50 decrease in price, ceteris paribus.
C) 3.5 percent for each 1 percent decrease in price, ceteris paribus.
D) 3.5 units for each $1 decrease in price, ceteris paribus.

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