In 2003,when Music Downloading First Took Off,Universal Music Slashed the Average

question 119

Multiple Choice

In 2003,when music downloading first took off,Universal Music slashed the average price of a CD from $21 to $15.The company expected the price cut to boost the quantity of CDs sold by 30 percent,other things remaining the same.What was Universal Music's estimate of the price elasticity of demand for CDs?

• A)0.9
• B)90
• C)1.11
• D)0.011
• E)0.2

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Definitions:

Imports and Exports

The practice of bringing goods and services into a country (imports) and sending goods and services out of a country (exports) to engage in international trade.

United States

A country located in North America comprised of 50 states, a federal district, five major self-governing territories, and various possessions, known for its diverse geography, culture, and economy.

Countertrade

A method of trade in which goods or services are exchanged for other goods or services rather than for money.

Equivalent Amount

A value or quantity that corresponds or is considered equal in value, function, or significance to another in a different context or format.