Studies indicate that the price elasticity of demand for beer is about 0.9 . A government policy aimed at reducing beer consumption changed the price of a case of beer from $10 to $20 . According to the midpoint method, the government policy should have reduced beer consumption by
a. 30%.
b. 40%.
c. 60%.
d. 74%.
c
You might also like to view...
Which of the following is true?
i. The easier it is to find substitutes for a good, the more price elastic the demand for the good is. ii. The demand for a good is more price elastic the smaller the proportion of income spent on it. iii. If demand is price elastic, lowering the price leads to a decrease in total revenue. A) only i B) only ii C) only iii D) i and ii E) i and iii
Which firm is not dealing with adverse selection
a. a manufacturer requires a 90 day probationary period for new employees b. a temporary clerical agency requires a typing test c. a manufacturer requires suppliers to be ISO 900 . certified d. Smokers get the same life insurance rates as non-smokers
Government action can cause a significant market demand shift.
Answer the following statement true (T) or false (F)
How do the labor force, the nation’s capital stock, and the rate of technical progress contribute to potential GDP growth and labor productivity?
What will be an ideal response?