7. If the price elasticity of demand for Pepsi is 1.

4, then a 14 percent increase in the quantity demanded

must be the result of

1. a 0.1 percent decrease in the price.

2. a 1 percent decrease in the price.
3. a 10 percent decrease in the price.
4. a 19.6 percent decrease in the price.

8. If a 12 percent increase in the quantity demanded must be the result of a 15 percent decrease in the
price, the price elasticity of demand for a haircut is

1. 0.65.
2. 0.80.
3. 1.25.
4. 1.50

9. If price increases from $10 to $20, total revenue will

1. increase by $120, so demand must be inelastic in this price range.

2. increase by $320, so demand must be inelastic in this price range.
3. decrease by $120, so demand must be elastic in this price range.
4. decrease by $320, so demand must be elastic in this price range.