Multiple choice

If the price elasticity of demand is a negative number, what does it mean?

  1. Demand is price elastic

  2. Demand is price inelastic

  3. The demand curve is downward sloping

  4. An increase in income will reduce the quantity demanded.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

This means that an increase in price leads to a fall in quantity demanded; this means the demand curve is downward sloping.

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