Suppose the Quantity of Root Beer Demanded Decreases from 105,000

question 120

Multiple Choice

Suppose the quantity of root beer demanded decreases from 105,000 litres per week to 95,000 litres per week when the price rises by 5 percent. The price elasticity of demand

• A)is 2.0.
• B)is 0.5.
• C)is 10.
• D)is inelastic.
• E)cannot be computed unless we know the original price and the new price.

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Definitions:

Tea

A beverage made by steeping dried leaves of the tea plant (Camellia sinensis) in hot water, known for its cultural and historical significance across the world.

Opium

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Mexican Southwest

Refers to the region of the United States that was formerly part of Mexico, including states such as California, Arizona, New Mexico, and Texas.

Catholic Church

The largest Christian church, led by the Pope, with a global presence and centuries of religious, social, and political influence.