Suppose That the Price of Product B Increases from $10

question 40

Multiple Choice

Suppose that the price of product B increases from $10 to $15 and, in response, quantity demanded declines from 100 to 80. Using the midpoint formula, what is the elasticity of demand?

• A)2.5
• B)1.33
• C)0.4
• D)0.56
• E)0.75

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