A price elasticity of demand equal to acirceuroldquo 04

Question

A price elasticity of demand equal to – 0.4 indicates that a

A) 4 percent increase in price leads to a 10 percent decrease in quantity demanded.

B) 1 percent increase in price leads to a 4 percent decrease in quantity demanded.

C) 0.4 percent decrease in price leads to a 1 percent increase in quantity demanded.

D) 10 percent decrease in price leads to a 4 percent increase in quantity demanded.