Refer to the information provided in Figure 5.3 below to answer the question(s) that follow.
Figure 5.3Refer to Figure 5.3. Use the midpoint formula. If the price of a gardenburger decreases from $9 to $8, the price elasticity of demand equals ________ and demand is ________.
A. -6.33; elastic
B. 6.33; elastic
C. -19.0; inelastic
D. -0.16; inelastic
Answer: A
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The investment demand curve is drawn with the ________ on the horizontal axis and the ________ on the vertical axis.
A. expected rate of return and interest rate; amount of investment B. amount of investment; disposable income C. amount of investment; expected rate of return and interest rate D. disposable income; amount of investment
The quantity of money demanded will decrease if the
A) nominal interest rate decreases. B) price level rises. C) real interest rate decreases. D) inflation rate decreases. E) nominal interest rate increases.
The price elasticity of demand for senior citizens purchasing coffee from McDonald's is ?5, while non-senior citizens have a price elasticity of demand equal to ?1.25. If it costs McDonald's $0.02 to produce a coffee, the optimal price for a cup of coffee for non-senior citizens and the resultant marginal cost under third-degree price discrimination are:
A. $0.10 and $0.02. B. $0.004 and $0.02. C. $10 and $0.20. D. $0.02 and $0.80.
The model of supply and demand leads to the prediction that low interest rates cause:
A. a decrease in housing prices, especially in cities with plenty of room for expansion. B. an increase in housing prices, especially in cities with plenty of room for expansion. C. an increase in housing prices, especially in cities with limited land. D. a decrease in housing prices, especially in cities with limited land.