Question

If the price elasticity of demand for a product is -2, this implies that:

 

A. if the price increases by 2 percent, the quantity demanded will decrease by 1 percent.

B. if the price increases by $1, the quantity demanded will decrease by 2 units.

C. the change in quantity demanded divided by the change in price is equal to 2.

D. if the price increases by 1 percent, the quantity demanded will decrease by 2 percent.

E. if the price increases 1 unit, the quantity demanded will decrease by 2 units.