Suppose that when the price per ream of recycled printer paper rises from $4 to $4.50, the quantity demanded falls from 800 to 600 reams per day
Using the midpoint formula, what is the price elasticity of demand (in absolute value) over this range?
A) 0.003 B) 0.41 C) 2.43 D) 4
C
You might also like to view...
It is argued that import substitution is a misguided trade policy if the intent is to promote long-term economic growth. Explain the reasons underlying this argument
What will be an ideal response?
Explain how expansionary and contractionary monetary policies affect aggregate demand through the exchange rate channel
What will be an ideal response?
The "greater fool" theory assumes that
A) markets are efficient. B) bubbles cannot exist in well-organized markets. C) it makes sense for an investor to buy an asset as long as there is someone else to buy it later for a higher price. D) bond market returns are always above stock market returns.
If the U.S. purchases oil from Nigeria, what is the effect in the foreign exchange market?
a. It will increase demand for U.S. dollars. b. It will decrease demand for U.S. dollars. c. It will increase supply of U.S. dollars. d. It will decrease supply of U.S. dollars.