A Decrease in the Price of Eggs from $1

question 149

Multiple Choice

A decrease in the price of eggs from $1.50 to $1.30 per dozen resulted in an increase in egg purchases in two cities. In Philadelphia, daily egg purchases increased from 6000 to 8000 dozens; in nearby Dover, Delaware, daily egg purchases increased from 300 to 400 dozens. The price elasticity of demand is therefore

• A) lower in the smaller city as would be expected.
• B) greater in the smaller city as would be expected.
• C) certainly affected by population differences in different markets.
• D) the same in Philadelphia as in Dover.

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