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Assume the elasticity of demand for electricity, a necessity good with few substitutes, is -0.2. If the electric company raised its rates by 10 percent,
Assume the elasticity of demand for electricity, a necessity good with few substitutes, is -0.2. If the electric company raised its rates by 10 percent, we would expect a(n):
a. indeterminable change in quantity demanded.
b. 2 percent decrease in quantity demanded.
c. 10 percent decrease in quantity demanded.
d. 2 percent increase in quantity demanded.
e. 10 percent increase in quantity demanded.
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