Discuss about the given statements

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Reference no: EM132137821

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.

Reference no: EM132137821

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