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Question
We say that a good has elastic demand whenever the absolute value of the price elasticity of demand is greater than 1. A 1 percent change in price therefore causes
A) exactly a 1 percent change in the quantity demanded.
B) a change of less than 1 percent in the quantity demanded.
C) a greater than 1 percent change in quantity demanded.
D) a change that cannot be determined based on 1 percent.
Answer
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