Question: Chapter 20 - Question 9
Are the following statements true or false? Explain your answers.
a. A 10 percent reduction in price that leads to a 5 percent increase in the amount purchased indicates a price elasticity of more than 1.
b. A 10 percent reduction in price that leads to a 2 percent increase in total expenditures (or total revenue) indicates a price elasticity of more than 1.
c. If the percentage change in price is less than the result- ant percentage change in quantity demanded, demand is inelastic.
From textbook: Gwartney, J. A., Stroup, R. L., Sobel, R. S., & Macpherson, D. A. (2015). Economics: Private and public choice (15th ed). Stamford, CT: Cengage Learning.