If the elasticity of demand coefficient for a good is one-sixth (in absolute terms), we know:
A)that for every 1% increase in quantity, there will be a 6% increase in price.
B)that for every 1% increase in quantity, there will be a 6% decrease in price.
C)that for every 6% increase in quantity, there will be a 1% increase in price.
D)that for every 6% increase in quantity, there will be a 1% decrease in price.

Question

If the elasticity of demand coefficient for a good is one-sixth (in absolute terms), we know:
A)​that for every 1% increase in quantity, there will be a 6% increase in price.
B)​that for every 1% increase in quantity, there will be a 6% decrease in price.
C)​that for every 6% increase in quantity, there will be a 1% increase in price.
D)​that for every 6% increase in quantity, there will be a 1% decrease in price.

Quizplus · Accepted Answer

The elasticity of demand coefficient measures the percentage change in quantity demanded for a good or service caused by a 1% change in the price of that good or service. In this case, the elasticity coefficient is one-sixth, which means that for every 1% increase in quantity demanded, there will be a 6% decrease in price. Therefore, the correct answer is B, which states that for every 1% increase in quantity demanded, there will be a 6% decrease in price.

If the Elasticity of Demand Coefficient for a Good Is