A 5 percent increase in the price of milk that results in a 2 percent decrease in the quantity of milk demanded yields a price elasticity of demand for milk of:
a. 0.5.
b. 0.4.
c. 1.0.
d. 1.4.
Answer: B
A 5 percent increase in the price of milk that results in a 2 percent decrease in the quantity of milk demanded yields a price elasticity of demand for milk of:
a. 0.5.
b. 0.4.
c. 1.0.
d. 1.4.
Answer: B