Suppose a Drought Increased the Price of Corn by 25

question 268

Multiple Choice

Suppose a drought increased the price of corn by 25 percent while it decreased the quantity by 50 percent. The price elasticity of demand equals

• A) 2.00.
• B) 0.50.
• C) 20.0.
• D) Zero.

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Definitions:

Equation

A mathematical statement indicating that two expressions represent the same value.

Variables

Elements, features, or factors that are likely to change or vary within the context of a mathematical function or statistical experiment.

Predict

To declare or indicate in advance; especially, to foretell on the basis of observation, experience, or scientific reason.

Confidence

The degree to which one can feel assured about an estimate, prediction, or result, often quantified in statistical analysis as a confidence interval.