At a price of $10, quantity demanded is 30 units. When the price rises to $11, quantity demanded is 24 units. What is the absolute price elasticity of demand?
A) 0.5
B) 0.43
C) 2.33
D) 6.0
Answer: C
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Monopolistic competition is characterized by excess capacity because
A. firms charge a price that is greater than marginal cost. B. firms produce at an output level less than the least-cost output. C. firms are always profitable in the long run. D. the demand for a product is perfectly elastic in this type of industry.
The law of supply states that there is
A) an inverse relationship between price and technology, ceteris paribus. B) a direct relationship between profit and quantity supplied, ceteris paribus. C) no relationship between price of resources and number of suppliers, ceteris paribus. D) a direct relationship between price and quantity supplied, ceteris paribus.
Recall the Application about housing prices in Cuba to answer the following question(s).Recent housing reforms in Cuba should give homeowners ________ incentives to repair their homes and therefore ________ construction of new homes.
A. more; decrease B. more; increase C. fewer; decrease D. fewer; increase
The short-run supply curve for the perfectly competitive firm is the portion of its
A) MC curve above the AVC curve. B) MC curve above the AFC curve. C) MC curve above the ATC curve. D) MC curve above the MR curve.