1.The ABC Computer Company wants to increase the quantity of computers it sells by 5%. If the price elasticity of demand is -2.5, the company must

decrease price by 0.5%.

decrease price by 2.0%.

increase price by 2.0%.

increase price by 0.5%.

1.A government wants to reduce electricity consumption by 40%. The price elasticity of demand for electricity is -10. The government must ________ the price of electricity by ________.

raise; 0.25%

lower; 0.25%

raise; 1.25%

raise; 4.0%