Refer to the graph shown. Calculate the approximate average elasticity of demand as the price falls from $18 to $0:
A. 1.
B. 3.
C. 3/2.
D. 2/3.
Answer: A
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Suppose that the capital stock initially is 1000, the depreciation rate is 0.08, and investment is 220. This makes the net growth of the capital stock
A) 300. B) 237.6. C) 202.4. D) 140.
If the price of pizza falls, the demand for pizza will rise
a. True b. False Indicate whether the statement is true or false
What is the maximum amount of good Y that can be purchased if X and Y are the only two goods available for purchase and Px = $5, Py = $10, X = 20, and M = 500?
A. 25 B. 40 C. 50 D. 75
Purchasing power parity does not hold in the short to medium run because
A. countries produce different goods. B. exports don't equal imports. C. exchange rates fluctuate too much. D. most business cycles are caused by shocks to aggregate demand.