Asked by
Gregory Redmond
on Dec 19, 2024
Verified
Suppose the price elasticity of demand for bread is 0.2. If the price of bread falls by 10 percent, the quantity demanded will increase by
A) 2 percent and total expenditures on bread will rise.
B) 2 percent and total expenditures on bread will fall.
C) 20 percent and total expenditures on bread will fall.
D) 20 percent and total expenditures on bread will rise.
Price Elasticity
A measure of how much the quantity demanded of a good responds to a change in its price, with high elasticity indicating greater responsiveness.
Total Expenditures
The sum of all spending or expenses incurred by an individual, household, or organization.
- Acquire knowledge on the concept of price elasticity relating to supply and demand.
- Explore the connection between variations in price and gross revenue.
Verified Answer
PS
Learning Objectives
- Acquire knowledge on the concept of price elasticity relating to supply and demand.
- Explore the connection between variations in price and gross revenue.